TITLE:
The Impact of the 2007 Global Financial Crisis on IPO Performance in Asian-Pacific Emerging Markets
AUTHORS:
George Giannopoulos, Stavros Degiannakis, Andrew Holt, Teerapon Pongpoonsuksri
KEYWORDS:
Benchmark-Adjusted Returns, Emerging Markets, Financial Crisis, IPO, Performance, Underpricing
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.11,
August
29,
2018
ABSTRACT: This paper assesses the comparative impact of the 2007
global financial crisis on the short and long-term performance of initial
public offerings (IPOs) in the Asian-Pacific emerging markets of Thailand,
China, South Korea, and Malaysia. Our results indicate that the short-term
performance or underpricing of Thai IPOs increased from 19% to 44% between the
pre-crisis and post-crisis periods. IPOs in each of the three other emerging
markets experienced a reduction in underpricing after the financial crisis.
While our results are consistent with previous IPO research, the degree of
underpricing in each emerging market exceeded the levels found in studies of
IPOs in developed countries. In terms of the long-term performance of IPOs, our
results suggest that IPOs in Thailand, China, and South Korea performed better
in the post-crisis period, while Malaysian IPOs performed worse. Our overall
findings suggest that the 2007 financial crisis affected IPO performance and
economic growth in each
of the markets studied.