IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v42y2006i6p5-24.html
   My bibliography  Save this article

The Benefit of Excluding Institutional Investors from Fixed-Price IPOs: Evidence from Taiwan

Author

Listed:
  • Anlin Chen
  • Lanfeng Kao

Abstract

A simple way to mitigate the winner's curse in initial public offerings (IPOs) is to reduce the number of informed investors in IPO markets. In Taiwan, institutional investors are not permitted to subscribe to fixed-price IPOs. Excluding institutional investors raises uninformed investors' allocation rates. We show that the winner's curse is still present in Taiwan's fixed-price IPO markets even without the participation of institutional investors, but that IPO underpricing is reduced by at least 4 percent due to alleviating the winner's curse, as institutional investors are excluded from the fixed-price offerings.

Suggested Citation

  • Anlin Chen & Lanfeng Kao, 2006. "The Benefit of Excluding Institutional Investors from Fixed-Price IPOs: Evidence from Taiwan," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 42(6), pages 5-24, December.
    • Handle: RePEc:mes:emfitr:v:42:y:2006:i:6:p:5-24
    as

    Download full text from publisher

    File URL: http://mesharpe.metapress.com/link.asp?target=contribution&id=CNR2428V81W27670
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Chao-Shi & Tang, Hui-Wen & Chen, Roger C.Y., 2017. "Does IPO subscription demand affect investor herd behavior in Taiwan?," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 258-272.
    2. Fouad Jamaani & Manal Alidarous, 2019. "Review of Theoretical Explanations of IPO Underpricing," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 6(1), pages 1-18.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:42:y:2006:i:6:p:5-24. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.