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Industry Clustering in Nordic Initial Public Offering Markets

Authors


P. Joakim Westerholm
School of Business H69
University of Sydney
NSW 2006 Australia
j.westerholm@econ.usyd.edu.au

ABSTRACT

We present institutional features of the Nordic initial public offering (IPO) markets and relate initial return, long-run performance and size of companies listed during 1991–2002 to industry clustering and level of listing requirements. High industry clustering is related to higher initial return and lower long-run performance supporting our prediction that information asymmetry has an impact on initial underpricing while temporary overvaluation affects long-run performance. The relatively high listing requirements and targeting of the main market have not protected the Nordic IPOs from poor long-run performance. On two markets, Norway and Denmark, IPOs outperform the all share market index.

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