Do IPOs Affect the Prices of Other Stocks? Evidence from Emerging Markets
Review of Financial Studies
2009
We show that the introduction of a large asset permanently affects the prices of existing assets in a market. Using data from 254 initial public offerings (IPOs) in 22 emerging markets, we find that portfolios that covary highly with the IPO experience a decline in prices relative to other portfolios during the month of the issue. The effects are stronger when the IPO is issued in a market that is less integrated internationally and when the IPO is bigger. This evidence is consistent with the idea that shocks to asset supply have a significant effect on asset prices.
- DOI
- 10.1093/rfs/hhn025
- Volume
- 22 (4)
- Pages
- 1505-1544
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref