THE LONG-RUN PERFORMANCE OF GREEK INITIAL PUBLIC OFFERINGS
Keywords:
Initial public offerings, long-run performance, Greece.Abstract
This article examines the long run performance of initial public offerings (IPO’s) in Greece, over the seven-year period of 1994-2000. After analyzing a sample of 176 IPO’s, it was concluded that IPO’s tend to outperform the market by 10,84% of cumulative market-adjusted return over the first three years from the listing day. The results are contradictory to empirical findings for many other developed markets. However, they are explained by such variables as initial returns, issue size and period and price volatility. Moreover, it was depicted that the «fads» hypothesis as well as the «windows of opportunity» and the «uncertainty and divergence of opinion» hypotheses can explain the long-term performance of the IPO’s listed at the Athens Stock Exchange.
References
Aggarwal R. and P. Rivoli, 1990, «Fads in the initial public offering market?», Financial Management 22, 42-53.
Aggarwal R., R. Leal and L. Hernandez, 1993, «The aftermarket performance of initial public offerings in Latin America», Financial Management 22, 42-53.
Barber B. and J. Lyon, 1997, «Detecting long-run abnormal stock returns: the empirical power and specification of test statistics», Journal of Financial Economics 43, 341, 372.
Brav A. and P. Gompers, 1997, «Myth or reality? The long - run underper-forrnance of initial public offerings: evidence from venture and non-venture capital-backed companies», Journal of Finance 52, 1791-1821.
Brav A., С. Geczy and P. A. Gompers, 1998, «Is the abnormal return following equity issuances anomalous?», Journal of Financial Economics 56, 209-249.
Brown J. S. and B. J. Warner, 1985, Using daily stock returns: the case of event studies», Journal of Financial Economics 14, 3-31.
Carter F. and A. Singh, 1998, «Underwriting reputation, initial returns and the long-run performance of IPO stocks», Journal of Finance 53, 285-311,
Clarkson P. and R. Thompson, 1990, «Empirical estimates of beta when investors face estimation risk», Journal of Finance, 431-453.
Corhay A., 2002, «The long run performance of Malaysian Initial Public Offerings (IPO’s): value and growth», Managerial Finance 28, 52-65.
Dawson S. M., 1987, «Secondary stock market performance of initial pubic offers, Hong Kong, Singapore and Malaysia: 1978-1984», Journal of Business Finance and Accounting Spring, 65-76.
De Bondt W. and R. Thaler, 1985, «Does the stock market overreact?», Journal of Finance 40, 793-808.
Dimson E. and P. Marsh, 1986, «Event study methodologies and the size effect», Journal of Financial Economics 17, 1-29.
Espenlaub S. and I. Tonks, 1998, «Post-IPO directors, sales and reissuing activity: an empirical test of IPO signaling models», Journal of Business Finance and Accounting 25, 1037-105.
Fama E. F., 1998, «Market efficiency, long term returns and behavioral finance», Journal of Financial Economics 49, 283-306.
Fama E.F. and К French, 1996, «Multifactor explanations of asset pricing anomalies», Journal of Finance 51, 55-84.
Finn F. J. and R. Higharn, 1988, «The performance of unseasoned new equity issues-cum-stock exchange listings in Australia», Journal of Banking and Finance 12, 333-351.
Glezakos M. and G. Gotzageorgis, 2005, «An empirical investigation of underpricing in Greek IPO’s: 1990-2000», European Research Studies, Forthcoming.
Ibbotson R. G., 1975, «Price performance of common stock new issues», Journal of Financial Economics 2, 235-272.
Kazantzis C. and M. Levis, 1995, «Price support and initial public offerings: evidence from the Athens Stock Exchange», Research in International Business and Finance 12, JA1 Press.
Khurshed A., R. Mudambi and M. Goergen, 1999, «On the long-run performance of IPO’s», Unpublished paper Isma Center, Reading University.
Kirn J. В., I. Krinsky and J. Lee, 1995, «The aftermarket performance of initial public offerings in Korea», Pacific-Basin Finance Journal 3, 429-448.
Kooli M. and J. M. Suret, 2001, «The aftermarket performance of initial public offerings in Canada», CIRANO Scientific Series 52, 1-35.
Kothari S. and J. Warner, 1997, «Measuring long-horizon security price performance», Journal of Financial Economics 43, 301-339.
Levis M., 1993, «The long run performance of initial public offerings: The U. K. experience 1980-88», Financial Management 22, 28-41.
Ljungqvist A. P., 1997, «Pricing initial public offerings: further evidence from Germany», European Economic Review 41, 1309-1320.
Loughran T and J. R, Ritter, 1995, «The new issues puzzle», Journal of Finance 50, 23-51.
Loughran Т., J. Ritter and K. Rydqvist, 2003, «Initial Public Offerings: International Insights», Pacific-Basin Finance Journal 2, 165-199 (updated June 25, 2003).
Lyon J., B. Barber B. and C. Tsai, 1999, «Improved methods for tests of long-run abnormal stock returns», Journal of Finance 54, 165-201.
Miller E., 2000, «Long run underperformance of initial public offerings: An explanation», Unpublished paper, University of New Orleans.
Neyman J. and E. Pearson, 1928, «On the use and interpretation of certain test criteria for purposes of statistical inference», Biometrica 20A, 175-240.
Papaioannou G. I., A. Safieddine, N. G. Travlos and N. D. Filippas, 1997, «The stock performance and the operational efficiency of enterprises after their listing in the Athens Stock Exchange», University of Piraeus Issue.
Paudyal K., В. Saadouni and R. J. Briston, 1998, «Privatization initial public offerings in Malaysia: initial premium and long-term performance», Pacific-Basin Finance Journal 6, 427-451.
Ritter J. R., 1991, «The long run performance of initial public offerings», Journal of Finance 46, 3-27.
Sefcik S. and R. Thomspon, 1986, «An approach to statistical inference in cross-sectional models with security abnormal returns as depended variable», Journal of Accounting Research 24 (2), 316-334.
Shah A., 1995, «The Indian IPO Market: Empirical Facts», Economics Working Paper Archive at WUSTL 9507003.
Shiller R. J., 1990, «Speculative prices and popular models», Journal of Economic Perspectives 4, 55-65.
Teoh S. H., I. Welch and T. J. Wong, 1998, «Earnings management and the long run market performance of initial public offerings», Journal of Finance 53,1935-1974.
Travlos N., L. Trigeorgis and N. Vafeas, 2001, «Shareholder wealth effects of dividend policy changes in an emerging stock market: the case of Cyprus», Journal of Multinational 5, 87-112.
Downloads
Published
How to Cite
Issue
Section
License
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
