Information Spillover Effects of IPOs using 2SLS

摘要

There are several Initial Public Offerings (IPOs) regulatory changes implemented in Taiwan stock markets since 2005. One of those new mechanisms is to release the stock IPOs pricing rules to underwriters. The underwriters and listed companies have been growing up rapidly in recent years, and the whole offer size has become full-scaled. However, foreign scholars found that pioneer companies have many uncertainties in IPOs due to there isn't any information about offer price and proceeds to refer. When companies want to decide the appropriate offer price and proceeds, they have to spend a lot of time and money on information gathering. If there existed information spillover, and the information would be acquired from the other companies which had finished IPOs. Therefore, we try to research whether there existed information spillover in Taiwan IPOs market using 2SLS and Probit to analyze. By empirical results, there exist positive information spillover in offer price and listing price revision. For underwriters, underwriter rank is based on underwriter reputation, and the underwriters which have better rank usually couldn't get the high initial return.