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Information Asymmetry and Investor Valuations of Initial Public Offerings: Two Dimensions of Organizational Reputation as Stock Market Signals

Published online by Cambridge University Press:  05 September 2019

Yang Liu ,
Peng Cheng ,
Zhe OuYang Open the ORCID record for Zhe OuYang [Opens in a new window]  and
Ao Wang
Yang Liu
Affiliation:
University of Science and Technology of China, China
Peng Cheng
Affiliation:
Nanjing University of Finance and Economics, China
Zhe OuYang*
Affiliation:
Nanjing University of Finance and Economics, China
Ao Wang
Affiliation:
University of Science and Technology of China, China
*
Corresponding author: Zhe OuYang (zhezhe@ustc.edu.cn)
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Abstract

The uncertainty and information asymmetry that surround initial public offering firms (IPOs) often introduce difficulties for potential investors to discern organizational value, thereby leading to ‘underpricing’. Using the signaling theory, we investigate the role of organizational reputation in the underpricing of IPOs. We analyze 463 initial public offerings in China from the period of 2010 to 2016 and find that being known for quality and generalized favorability dimensions of reputation are negatively related with underpricing on the first day of trading. In addition, we find that the negative effects of organizational reputation on underpricing are mediated by investor attention.

摘要

摘要

围绕公司首次公开发行股票的不确定性和信息不对称，往往使得潜在投资者难以辨别企业的价值，从而导致公司首发抑价。基于信号理论，我们研究了组织声誉在公司首发抑价中的作用。我们分析了2010至2016年间中国463个首次公开发行股票的企业，发现企业声誉中以品质著称和总的喜爱度两个维度与公司首发抑价呈显著的负相关。此外，我们发现投资者关注在企业声誉与公司首发抑价之间的负面关系中充当着中介作用。

Аннотация

АННОТАЦИЯ

Неопределенность и информационная асимметрия, которые сопровождают первоначальные публичные предложения (IPO), часто создают трудности для потенциальных инвесторов при определении организационной ценности, что приводит к “занижению цены”. На основании теории сигнализации, мы исследуем роль репутации организации при установлении заниженной цены в условиях IPO. Мы анализируем 463 первичных публичных предложений в Китае за период с 2010 по 2016 годов и приходим к выводу о том, что такие аспекты репутации, как известность своим качеством и общие благоприятные показатели, отрицательно влияют на занижение цены в первый день торгов. Более того, мы обнаруживаем, что негативное влияние организационной репутации на занижение цены нивелируется благодаря вниманию инвесторов.

Resumen

RESUMEN

La incertidumbre y las asimetrías de información que rodean las empresas de ofertas públicas iniciales (IPOs) con frecuencia presentan dificultades para inversionistas potenciales para discernir el valor organizacional, llevando con esto a una “infravaloración”. Usando la teoría de señalización, investigamos el rol de la reputación organizacional en la infravaloración de ofertas públicas iniciales. Analizamos 463 ofertas públicas iniciales en China en el periodo 2010 a 2016 y encontramos que ser conocido por calidad y favorabilidad generalizada las dimensiones de reputación se relacionan negativamente con la infravaloración en el primer día de operaciones bursátiles. Además, encontramos que los efectos negativos de la reputación organizacional en la infravaloración son mediados por la atención de los inversionistas.

Keywords

initial public offeringinvestor attentionorganizational reputationsignaling首次公开发行投资者关注组织声誉信号oferta pública inicialatención del inversionistareputación organizacionalseñalizaciónпервоначальное публичное предложениевнимание инвестороворганизационная репутациясигнализация
Type
Article
Information
Management and Organization Review , Volume 16 , Issue 4 , October 2020 , pp. 945 - 964
Copyright
Copyright © 2019 International Association for Chinese Management Research

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Footnotes

Accepted by: Senior Editor Bent Petersen

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