We provide a model of bookbuilding in IPOs, in which the issuer can choose to ration shares. We consider two allocation rules. Under share dispersion, before informed investors submit their bids, they know that, in the aggregate, winning bidders will receive only a fraction of their demand. We...

We analyse a regulatory change in the Japanese IPO market that created an abrupt shift from hybrid price-discriminatory auctions to bookbuilding. We find that bookbuilding leads to significantly higher underpricing than hybrid price-discriminatory auctions. Further, we find evidence that price...

We analyze a regulatory change in the Japanese IPO market that created an abrupt shift from hybrid price-discriminatory auctions to bookbuilding. We find that bookbuilding leads to higher underpricing than hybrid price-discriminatory auctions. Furthermore, we find evidence that price accuracy...

During the latter part of the 1990s the introduction of the euro, the dramatic increase in the supply of venture capital in most EU countries, and the creation of several new equity markets targeted at innovative firms have dramatically transformed the financing prospects of European...

Using a large sample of 13,674 initial public offerings (IPOs) from 37 countries, we find that trading rules on market manipulation reduce IPO underpricing. The effect is weaker for IPOs certified by reputable intermediaries, in countries with greater shareholder rights protection, better...

Token offerings or initial coin offerings (ICOs) are smart contracts based on blockchain technology designed to raise external finance without an intermediary. The new technology might herald a revolution in entrepreneurial and corporate finance, with soaring market growth rates over the last...

There is significant disagreement about whether, when and why IPO firms manage earnings. We contribute to the literature by precisely identifying the timing and motives behind earnings management by IPO firms. We emphasize that the period around IPO is characterized by two distinct events: the...

This paper examines the influence of the firm's location on IPO underpricing using data from the Chinese stock market. We find that the geographical proximity to major metropolitan areas reduces the magnitude of IPO underpricing: the distance between the firm and the top metropolitan areas is...