ABSTRACT

We provide new evidence that local investors are peculiarly biased towards local IPO stocks. Taking the well-known investor preference for local stocks a step further, we contribute by showing that local IPOs boost stock market participation far more intensely than local listed firms. Interestingly, the effect is driven by individuals born and raised in the region, having zero effect for those who have moved to the area. Consistent with underwriters significantly under-estimating the local investors’ demand in local IPOs, the probability of a private firm to go public, the IPO underpricing and the cross-sectional volatility of IPO initial returns, increase in remote firms where the local investors’ demand in local IPOs is particularly high. Overall, our results suggest that local investors are crucial for the IPO decision.

摘要

我们提供了新的证据，表明本地投资者特别偏爱本地 IPO 股票。将众所周知的投资者对本地股票的偏好更进一步，我们通过表明本地 IPO 比本地上市公司更强烈地促进股市参与来做出贡献。有趣的是，这种影响是由在该地区出生和长大的个人推动的，对搬到该地区的人的影响为零。与承销商严重低估本地投资者对本地 IPO 的需求、民营企业上市的概率、IPO 定价偏低和 IPO 初始回报的横截面波动、本地投资者需求的偏远企业增加一致在本地 IPO 中尤其高。总体而言，我们的结果表明本地投资者对 IPO 决策至关重要。