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Journal of Economics and Finance

Erschienen in:

01.10.2011

Credit ratings and long-term IPO performance

verfasst von: Kam C. Chan, Yung Ling Lo

Erschienen in: Journal of Economics and Finance | Ausgabe 4/2011

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Abstract

We examine the impact of credit ratings on long-term IPO pricing. Our findings suggest that the provision of credit ratings prior to IPO reduces information asymmetry and improves market efficiency. The increase in disclosure through credit ratings can reduce information risk and price discounts. IPOs with (without) credit ratings are less (more) underpriced and more positively (negatively) perceived by outside investors. The market reactions for rated IPOs are more immediate and more complete (as the result of improved transparency), while long-term performance is insignificant when information asymmetry is reduced.

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We thank Heng An for the information.

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Titel: Credit ratings and long-term IPO performance
verfasst von: Kam C. Chan
Yung Ling Lo
Publikationsdatum: 01.10.2011
Verlag: Springer US
Erschienen in: Journal of Economics and Finance / Ausgabe 4/2011
Print ISSN: 1055-0925
Elektronische ISSN: 1938-9744
DOI: https://doi.org/10.1007/s12197-010-9137-8

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