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On IPO Market Anomalies through the Emerging Stock Market in Taiwan

Author

Listed:
  • Yi-Shuan Chen

    (Ph.D. Program in Business, Feng Chia University, Taiwan and Department of Banking and Insurance, National Taichung Institute of Technology, Taiwan)

  • Shin-Herng Michelle Chu

    (Department of Finance, Feng Chia University, Taiwan)

Abstract

This study investigates the long-term performance of initial public offering (IPO) firms in Taiwan since it established a pre-IPO market, the Emerging Stock Market (ESM), starting in 2002. The analytical results indicate that IPO firms in Taiwan suffer long-term post-issue deterioration in operating performance, and the difference in deterioration between ESM and direct listing firms is more significant for the Taiwan Stock Exchange than for the Gre Tai Securities Market. This phenomenon can be explained by the overly-optimistic-market-expectations and the window-of-opportunity hypotheses; however, managerial ownership control variables are not statistically significant.

Suggested Citation

  • Yi-Shuan Chen & Shin-Herng Michelle Chu, 2010. "On IPO Market Anomalies through the Emerging Stock Market in Taiwan," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 9(1), pages 57-76, April.
    • Handle: RePEc:ijb:journl:v:9:y:2010:i:1:p:57-76
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    References listed on IDEAS

    as
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    3. Kutsuna, Kenji & Okamura, Hideo & Cowling, Marc, 2002. "Ownership structure pre- and post-IPOs and the operating performance of JASDAQ companies," Pacific-Basin Finance Journal, Elsevier, vol. 10(2), pages 163-181, April.
    4. Daying Yan & Jun Cai, 2003. "Long-Run Operating Performance of Initial Public Offerings in Japanese Over-the-Counter Market (1991–2001): Evidence and Implications," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 10(2), pages 239-274, September.
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    6. Ritter, Jay R, 1991. "The Long-run Performance of Initial Public Offerings," Journal of Finance, American Finance Association, vol. 46(1), pages 3-27, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    initial public offering; operating performance; emerging stock market;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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