Preprint Article Version 1 NOT YET PEER-REVIEWED

Initial Public Offerings, Underpricing and Performance: The Case of Top International Brands

  1. Department of Economics and Management, Pavia University, Corso Str. Nuova, 106/c, 27100 Pavia PV, Italy
  2. Department of Finance, Bocconi University, Via Roberto Sarfatti, 25, 20100 Milano, Italy
Version 1 : Received: 8 July 2016 / Approved: 9 July 2016 / Online: 9 July 2016 (11:02:46 CEST)

How to cite: Harasheh, M.; Gatti, S. Initial Public Offerings, Underpricing and Performance: The Case of Top International Brands. Preprints 2016, 2016070016 (doi: 10.20944/preprints201607.0016.v1). Harasheh, M.; Gatti, S. Initial Public Offerings, Underpricing and Performance: The Case of Top International Brands. Preprints 2016, 2016070016 (doi: 10.20944/preprints201607.0016.v1).

Abstract

The present study aims at investigating the relationship between Initial Public Offerings (IPOs) variables mainly underpricing on one hand, and the brand value measures on the other. Our final data set is 104 international brand companies. We implement empirical approach using hierarchical OLS regression and descriptive statistics. We show that underpricing is positively related to brand value which emphasizes the marketing role of going public and underpricing in enhancing brand equity through the product market, which additionally confirms some information asymmetry models. We also find that on average brand companies had not been recognized as brands at the IPO time. Moreover, we show the positive role of private equity in enhancing brand value, additionally, the non-linear association between underpricing and brand value is not evident. Finally, we draw some policy implication and suggestions for future research.

Subject Areas

initial public offering; underpricing; private equity; brand value

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