Journal article
Litigation risk and IPO underpricing
Journal of financial economics, v 65(3), pp 309-335
01 Sep 2002
Abstract
We examine the relation between risk and IPO underpricing and test two aspects of the litigation-risk hypothesis: (1) firms with higher litigation risk underprice their IPOs by a greater amount as a form of insurance (insurance effect) and (2) higher underpricing lowers expected litigation costs (deterrence effect). To adjust for the endogeneity bias in previous studies, we use a simultaneous equation framework. Evidence provides support for both aspects of the litigation-risk hypothesis.
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Details
- Title
- Litigation risk and IPO underpricing
- Creators
- Michelle Lowry - Pennsylvania State UniversitySusan Shu - Boston College
- Publication Details
- Journal of financial economics, v 65(3), pp 309-335
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000177656900002
- Scopus ID
- 2-s2.0-0036334384
- Other Identifier
- 991021881498204721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance
- Economics