We use the cointegration technique to reexamine the contending lapse rate hypotheses: the emergency fund hypothesis and the interest rate hypothesis. We find that the unemployment rate affects the lapse rate in both the long and short run, whereas the interest rate causes variations in the lapse...

This paper proposes three hypotheses based on stock market conditions to explain why Taiwanese IPO auctions have lost market share to fixed-price offers: the risk-averse issuer hypothesis, the pricing conflict hypothesis, and the demand inelasticity of stocks hypothesis. The risk-averse issuer...

We test whether investors in primary markets also exhibit overconfidence. Using data from 77 Taiwanese discriminatory IPO auctions, we test the overconfidence hypothesis for three types of investors (i.e. bidders in auctions): male individuals, female individuals, and institutional investors. We...

The literature on foreign portfolio ownership in developed markets suggests that investors minimize their informational disadvantage when making foreign investments. We examine Taiwan, an emerging financial market where news of foreign institutional portfolio ownership is closely and widely...

Using a unique data set, we find that large individual investors are successful at picking stocks. Large individual investors' correlated trades can not only move synchronous stock prices but also positively predict future returns. More importantly, they tend to trade before major earnings...