Information Disclosure and Ipo Valuation: What Kinds of Information Matter and Is More Information Always Better?

Content Provider	Semantic Scholar
Author	Nam, Daeil Arthurs, Jonathan D. Nielsen, Marsha L. Mousa, Fariss T.
Copyright Year	2009
Abstract	Many financial theories emphasize the positive relationship between information disclosure and firm performance. However, disclosure of information can harm a firm if others make strategic use of the information. In this paper, we test the effect of information disclosure on performance. Using a sample of all firms which went through an IPO in the U.S. during the 2001-2003 period, we examine the relationship between different types of information including 1) the specificity of information, 2) the accuracy of information, and 3) the amount of time for information diffusion and the valuation of the IPO firm. We use OLS regression to predict IPO performance including 1) underpricing, 2) percent premium and 3) 3 year cumulative average adjusted returns. Also, we check for a potential curvilinear relationship between the level of information disclosure and IPO performance. We find a negative relationship between information disclosure and underprcing but a positive relationship with percent premium. The implications of these findings and several directions for future research are discussed as well.
Starting Page	1
Ending Page	1
Page Count	1
File Format	PDF HTM / HTML
DOI	10.2139/ssrn.1348222
Volume Number	28
Alternate Webpage(s)	http://digitalknowledge.babson.edu/cgi/viewcontent.cgi?article=1218&context=fer
Alternate Webpage(s)	https://doi.org/10.2139/ssrn.1348222
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article