The authors are from the University of Oviedo, Spain. They wish to thank the anonymous referee and the participants of the European Financial Management Association at Lugano (2001) and the Financial Management Association European Conference at Copenhagen (2002), especially Raghu Rau and Richard Pettway, for their relevant comments that helped to improve the paper. They are grateful for the help given by Susana Menéndez in the construction of firm portfolios. This work has benefited from financial support provided by the Dirección General de Enseñanza Superior e Investigación Científica, Project PB98-1526 and by the Ministerio de Ciencia y Tecnología, Project BEC2000-0982.
Signalling and the Long-run Performance of Spanish Initial Public Offerings (IPOs)
Article first published online: 7 FEB 2005
Journal of Business Finance & Accounting
Volume 32, Issue 1-2, pages 325–350, January 2005
How to Cite
Álvarez, S. and González, V. M. (2005), Signalling and the Long-run Performance of Spanish Initial Public Offerings (IPOs). Journal of Business Finance & Accounting, 32: 325–350. doi: 10.1111/j.0306-686X.2005.00596.x
- Issue published online: 7 FEB 2005
- Article first published online: 7 FEB 2005
- (Paper received October 2002, revised and accepted January 2004)
- Initial Public Offering (IPO);
- long-run returns and signalling
Abstract: Academic research into firms that have gone public has focused on the study of two anomalies: initial underpricing and long-run underperformance. We analyse Spanish Initial Public Offerings to provide additional evidence on the long-run performance of IPOs and its relationship with initial underpricing. Results reveal the existence of negative long-run abnormal stock returns, in line with the international literature. Long-run performance presents a positive relationship with underpricing and the volume of funds obtained in seasoned offerings, in consonance with the predictions of Allen and Faulhaber (1989), Welch (1989) and Grinblatt and Hwang (1989).