Media Coverage and IPO Pricing Around the World

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal

3 Scopus Citations
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Original languageEnglish
Pages (from-to)1515-1553
Journal / PublicationJournal of Financial and Quantitative Analysis
Volume55
Issue number5
Online published26 Jul 2019
Publication statusPublished - Aug 2020

Abstract

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.

Citation Format(s)

Media Coverage and IPO Pricing Around the World. / Chen, Yangyang; Goyal, Abhinav; Veeraraghavan, Madhu; Zolotoy, Leon.

In: Journal of Financial and Quantitative Analysis, Vol. 55, No. 5, 08.2020, p. 1515-1553.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal