Factor Analysis of Underestimation for the Russian Companies IPO
https://doi.org/10.38050/01300105201742
Abstract
The problem of IPO underpricing became relevant in the late 1960s. Since then various theories were advanced connecting this phenomenon to many factors: from information asymmetry in the market to the cultural peculiarities of the host country. The article aims to identify factors that have a significant influence on the occurrence and magnitude of underpricing of shares in Russian companies preparing their IPOs. Research and theories of foreign and Russian authors devoted to the subject were analyzed, which uncovered 7 main factors, which are further considered in terms of their influence on the occurrence and magnitude of underpricing. To test the hypotheses, data for 138 IPOs of Russian companies for 1996-2015 was collected. Analysis showed that two factors influence the occurrence and the magnitude of the underpricing of Russian companies’ IPOs: the amount of accommodation and the provision of accommodation prices in the price corridor, announced by the company. In conclusion, recommendations for Russian issuers on the formation of the strategies of the IPO are made.
About the Author
V. V. Nazarova
National research University "Higher school of Economics"
Russian Federation
Russian Federation
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Review
For citations:
Nazarova V.V. Factor Analysis of Underestimation for the Russian Companies IPO. Moscow University Economics Bulletin. 2017;(4):29-51. (In Russ.) https://doi.org/10.38050/01300105201742
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