This study applies signaling theory to examine the impact of environmental disclosures on equity underpricing at initial public offerings (IPO) when private firms list on stock exchanges. Firms often under-price their shares to attract investors as IPOs have high information asymmetry between firms and investors. Using a linguistic technique on environmental disclosures in prospectuses from 2009 to 2019 in the Singapore Exchange, we find that disclosures with a positive tone correlate with lower underpricing, but only if these disclosures are authentic. This finding is robust to different model specifications and measurements. We provide new evidence that linguistic features, that is, tone and authenticity, interact to influence a key IPO outcome. The results suggest that investors are not easily attracted by positive disclosure tones but are also concerned with the authenticity of such disclosures. This finding informs firms and various stakeholders navigating the nascent and growing wave of sustainability reporting in Singapore.

中文翻译：

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环境披露对首次公开募股抑价的影响：新加坡的可持续发展

本研究应用信号理论来检验当私营公司在证券交易所上市时环境信息披露对首次公开募股 (IPO) 股票抑价的影响。由于首次公开募股在公司和投资者之间存在高度信息不对称，因此公司经常低估其股票价格以吸引投资者。对 2009 年至 2019 年新加坡交易所招股说明书中的环境披露使用语言学技术，我们发现具有积极基调的披露与较低的抑价相关，但前提是这些披露是真实的。这一发现对于不同的模型规格和测量是稳健的。我们提供了新的证据表明语言特征（即语气和真实性）相互作用会影响关键的 IPO 结果。结果表明，投资者不容易被积极的披露基调所吸引，但也关注此类披露的真实性。这一发现为公司和各种利益相关者提供了信息，帮助他们驾驭新加坡新兴和不断增长的可持续发展报告浪潮。