IPO underpricing and management quality : an empirical study of the Norwegian equity market

摘要

In this thesis I empirically examine 41 initial public offerings (IPOs), carried out on the OsloStock Exchange (OSE) between 2004 and 2006. In addition to investigating the underpricingin general, the focus of this thesis is to study the relationship between IPO underpricing andthe quality of a company’s management. I hypothesize that companies with better and morereputable managers will incur lower underpricing.I find that the anomaly of underpricing is present in the Norwegian equity market, as thedistribution of the data is positively skewed. The average company in the sample isunderpriced by approximately 3%.The analysis confirms the partial adjustment theory. In addition, I find that there are nosignificant differences in underpricing across industries, or between venture backed and nonventurebacked companies.Finally, I confirm my hypothesis that there is a negative relationship between managementquality and underpricing.