TY - JOUR
T1 - Media Coverage and IPO Pricing Around the World
AU - Chen, Yangyang
AU - Goyal, Abhinav
AU - Veeraraghavan, Madhu
AU - Zolotoy, Leon
PY - 2020/8
Y1 - 2020/8
N2 - We study how media coverage impacts pricing of IPOs around the world. Higher media coverage in the pre-IPO period leads to lower IPO initial returns. The effect is mitigated in countries with better financial reporting quality, greater shareholder rights protection, and more stringent media censorship, and for IPOs certified by reputable intermediaries, while it is amplified in countries with higher levels of media penetration and media trust. Further, IPOs with higher pre-IPO media coverage have lower ex-post price revision volatility. Our findings suggest that higher pre-IPO media coverage reduces information asymmetry among investors, leading to less underpriced IPOs.
AB - We study how media coverage impacts pricing of IPOs around the world. Higher media coverage in the pre-IPO period leads to lower IPO initial returns. The effect is mitigated in countries with better financial reporting quality, greater shareholder rights protection, and more stringent media censorship, and for IPOs certified by reputable intermediaries, while it is amplified in countries with higher levels of media penetration and media trust. Further, IPOs with higher pre-IPO media coverage have lower ex-post price revision volatility. Our findings suggest that higher pre-IPO media coverage reduces information asymmetry among investors, leading to less underpriced IPOs.
UR - http://www.scopus.com/inward/record.url?scp=85069715912&partnerID=8YFLogxK
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-85069715912&origin=recordpage
U2 - 10.1017/S0022109019000486
DO - 10.1017/S0022109019000486
M3 - RGC 21 - Publication in refereed journal
SN - 0022-1090
VL - 55
SP - 1515
EP - 1553
JO - Journal of Financial and Quantitative Analysis
JF - Journal of Financial and Quantitative Analysis
IS - 5
ER -