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The impact of national culture on IPO underpricing and its influence mechanism: A cross-border empirical research

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  • Zhou, Xiaoguang
  • Tang, Xinmeng
  • Wu, Shihwei

Abstract

This paper aims to explore the influence, and more importantly, the influence mechanism of national culture on initial public offering (IPO). Consistent with hypotheses developed, empirical results find strong evidence that culture as a non-institutional force significantly affects IPO underpricing. Culture with high uncertainty avoidance, high tightness, and low trust respectively enhances effects of legal protection, peer underpricing behavior pressure, and information asymmetry on IPO underpricing.

Suggested Citation

  • Zhou, Xiaoguang & Tang, Xinmeng & Wu, Shihwei, 2022. "The impact of national culture on IPO underpricing and its influence mechanism: A cross-border empirical research," Finance Research Letters, Elsevier, vol. 47(PA).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321005067
    DOI: 10.1016/j.frl.2021.102543
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    References listed on IDEAS

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    Cited by:

    1. Demir, Ender & García-Gómez, Conrado Diego & Díez-Esteban, José María & Farinha, Jorge Bento, 2023. "How does uncertainty impact IPO activity? International evidence," Finance Research Letters, Elsevier, vol. 58(PC).
    2. Zhang, Zhi & Zhang, Di & Jiang, Senyang & Li, Ao & Yu, Wei, 2023. "The effect of language on IPO underpricing: Evidence from a multinational research," International Review of Financial Analysis, Elsevier, vol. 89(C).
    3. Lyu, Junli, 2024. "China cross-border e-commerce comprehensive pilot zone and urban residents' tourism consumption: empirical study based on CHFS data," Finance Research Letters, Elsevier, vol. 64(C).

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    More about this item

    Keywords

    National culture; IPO underpricing; Influence mechanism; Cross-culture difference;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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