Why are the French so different from the Germans? Underpricing of IPOs on the Euro New MarketsCitation formats

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Why are the French so different from the Germans? Underpricing of IPOs on the Euro New Markets. / Goergen, Marc; Khurshed, Arif; Renneboog, Luc.

In: International Review of Law and Economics, Vol. 29, No. 3, 09.2009, p. 260-271.

Research output: Contribution to journalArticle

Harvard

Goergen, M, Khurshed, A & Renneboog, L 2009, 'Why are the French so different from the Germans? Underpricing of IPOs on the Euro New Markets', International Review of Law and Economics, vol. 29, no. 3, pp. 260-271. https://doi.org/10.1016/j.irle.2009.02.006

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Vancouver

Author

Goergen, Marc ; Khurshed, Arif ; Renneboog, Luc. / Why are the French so different from the Germans? Underpricing of IPOs on the Euro New Markets. In: International Review of Law and Economics. 2009 ; Vol. 29, No. 3. pp. 260-271.

Bibtex

@article{d1f47c989f56484aaf35bfdbde907536,
title = "Why are the French so different from the Germans? Underpricing of IPOs on the Euro New Markets",
abstract = "We study the underpricing of firms listed on the two largest EuroNM stock exchanges, the Neuer Markt of Germany and the Nouveau March{\'e} of France. We find that the high underpricing in these two markets - contrary to the evidence on the US - is not driven by insiders' selling behaviour. However, the large underpricing is caused by the high degree of riskiness of the issuing firms and by the partial adjustment phenomenon of offer prices to compensate institutional investors for the truthful revelation of their demand for the shares. For France, lock-up agreements act as substitutes to underpricing, but not so for Germany. We also explore the reasons for the large difference in underpricing between the German and the French IPOs: German firms are more underpriced because they are riskier, have larger price revisions, have less stringent VC lock-up contracts, and go public mostly during the hot issue period when the general level of underpricing in all IPO markets is substantially higher. {\circledC} 2009 Elsevier Inc. All rights reserved.",
keywords = "European New Markets, High technology, IPOs, Lock-up agreements, Underpricing, Venture capital",
author = "Marc Goergen and Arif Khurshed and Luc Renneboog",
year = "2009",
month = "9",
doi = "10.1016/j.irle.2009.02.006",
language = "English",
volume = "29",
pages = "260--271",
journal = "International Review of Law and Economics",
number = "3",

}

RIS

TY - JOUR

T1 - Why are the French so different from the Germans? Underpricing of IPOs on the Euro New Markets

AU - Goergen, Marc

AU - Khurshed, Arif

AU - Renneboog, Luc

PY - 2009/9

Y1 - 2009/9

N2 - We study the underpricing of firms listed on the two largest EuroNM stock exchanges, the Neuer Markt of Germany and the Nouveau Marché of France. We find that the high underpricing in these two markets - contrary to the evidence on the US - is not driven by insiders' selling behaviour. However, the large underpricing is caused by the high degree of riskiness of the issuing firms and by the partial adjustment phenomenon of offer prices to compensate institutional investors for the truthful revelation of their demand for the shares. For France, lock-up agreements act as substitutes to underpricing, but not so for Germany. We also explore the reasons for the large difference in underpricing between the German and the French IPOs: German firms are more underpriced because they are riskier, have larger price revisions, have less stringent VC lock-up contracts, and go public mostly during the hot issue period when the general level of underpricing in all IPO markets is substantially higher. © 2009 Elsevier Inc. All rights reserved.

AB - We study the underpricing of firms listed on the two largest EuroNM stock exchanges, the Neuer Markt of Germany and the Nouveau Marché of France. We find that the high underpricing in these two markets - contrary to the evidence on the US - is not driven by insiders' selling behaviour. However, the large underpricing is caused by the high degree of riskiness of the issuing firms and by the partial adjustment phenomenon of offer prices to compensate institutional investors for the truthful revelation of their demand for the shares. For France, lock-up agreements act as substitutes to underpricing, but not so for Germany. We also explore the reasons for the large difference in underpricing between the German and the French IPOs: German firms are more underpriced because they are riskier, have larger price revisions, have less stringent VC lock-up contracts, and go public mostly during the hot issue period when the general level of underpricing in all IPO markets is substantially higher. © 2009 Elsevier Inc. All rights reserved.

KW - European New Markets

KW - High technology

KW - IPOs

KW - Lock-up agreements

KW - Underpricing

KW - Venture capital

U2 - 10.1016/j.irle.2009.02.006

DO - 10.1016/j.irle.2009.02.006

M3 - Article

VL - 29

SP - 260

EP - 271

JO - International Review of Law and Economics

JF - International Review of Law and Economics

IS - 3

ER -