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Evidence on the effect of ‘Claw-Back’ provisions on IPO share allocation and underpricing in Hong Kong
Anna P. I. Vong1; Duarte Trigueiros2
2017-11-02
Source PublicationApplied Economics
ABS Journal Level2
ISSN0003-6846
Volume49Issue:51Pages:5231-5244
Abstract

The article examines share allocation practices of over 300 initial public offerings (IPOs) in Hong Kong during the years immediately following the enacting of a ‘Claw-Back’ provision for IPO share reallocation. The examination of exhaustive micro-level data reveals that small (uninformed, retail) investors earn higher initial returns than large investors. Before the enacting of the ‘Claw-Back’ provision, small investors were unfavourably treated in relation to large investors. The pattern now prevailing in the proportion of shares allocated to small and large investors also differs from that observed previously. When attempting to isolate the determinants of IPO underpricing in Hong Kong, the article also shows that both the ‘informed demand’ hypothesis and the signalling effect of underwriters’ reputation are significant determinants of underpricing. Such result, not visible when pooled OLS regressions are used, becomes apparent through the use of a system of simultaneous equations.

KeywordInitial Public Offerings Share Allocation Ex-ante Uncertainty Subscription Rate Underwriters’ Reputation
DOIhttps://doi.org/10.1080/00036846.2017.1302067
URLView the original
Indexed BySSCI ; SSCI
Language英语
WOS Research AreaBusiness & Economics
WOS SubjectEconomics
WOS IDWOS:000407200700005
PublisherROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD, 2-4 PARK SQUARE, MILTON PARK, ABINGDON OX14 4RN, OXON, ENGLAND
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Cited Times [WOS]:1   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionFaculty of Business Administration
Corresponding AuthorAnna P. I. Vong
Affiliation1.University of Macau, Taipa, Macau, China
2.University Institute of Lisbon, Lisbon, Portugal
First Author AffilicationUniversity of Macau
Corresponding Author AffilicationUniversity of Macau
Recommended Citation
GB/T 7714
Anna P. I. Vong,Duarte Trigueiros. Evidence on the effect of ‘Claw-Back’ provisions on IPO share allocation and underpricing in Hong Kong[J]. Applied Economics,2017,49(51):5231-5244.
APA Anna P. I. Vong,&Duarte Trigueiros.(2017).Evidence on the effect of ‘Claw-Back’ provisions on IPO share allocation and underpricing in Hong Kong.Applied Economics,49(51),5231-5244.
MLA Anna P. I. Vong,et al."Evidence on the effect of ‘Claw-Back’ provisions on IPO share allocation and underpricing in Hong Kong".Applied Economics 49.51(2017):5231-5244.
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