Underpricing and distance: an empirical analysis

Pennacchio, Luca and Del Monte, Alfredo and Acconcia, Antonio (2010): Underpricing and distance: an empirical analysis.

Abstract

This paper test the hypothesis that distance of firms from the main financial centre affects underpricing positively. Higher is the distance higher is the uncertainty about the true value of the listing firm and lower the issue price. Econometric results show that, in the Italian case, there is a positive effect of distance from the financial centre on the underpricing. This finding holds in France but not in Germany.

• Item Type: MPRA Paper
• Language: English
• Keywords: Underpricing; IPO; Distance
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O18 - Urban, Rural, Regional, and Transportation Analysis ; Housing ; Infrastructure; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance; G - Financial Economics > G2 - Financial Institutions and Services > G24 - Investment Banking ; Venture Capital ; Brokerage ; Ratings and Ratings Agencies

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