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Student Number 944208005
Author Shih-ya Peng(^֨)
Author's Email Address No Public.
Statistics This thesis had been viewed 1542 times. Download 11 times.
Department Finance
Year 2006
Semester 2
Degree Master
Type of Document Master's Thesis
Language English
Title The Impact of Initial Public Offering announcements on firm's rivals, suppliers and customers
Date of Defense 2007-06-27
Page Count 41
Keyword
  • IPO
  • wealth effect
  • Abstract Previous literatures examine the direct effect of the IPO on the firm foundation. Recently, some researches examine if the IPOs announcement has industry-wide effect. We broaden the investigation through the whole supply chain by examining the wealth effect of IPOs announcement on the rivals, customers and suppliers. This paper finds that when the rivals are under the information effect, the customers and suppliers will suffer positive effect. Otherwise, when the rivals are under the competition effect, the customers and suppliers will suffer negative effect. Moreover, the size of the IPO firm is significantly positively related with the CAR of the rivals, customers and suppliers. We conjecture that there are still some variables which would be more powerful in explaining the abnormal return of the rivals, customers and suppliers.
    Table of Content Abstract                   II
    1. Introduction              1
    2. Hypothesis and related literature     2
    2.1 Information Effect          2
    2.2 Competition effect          4
    3. Data and methodology          6
    3.1 The IPOs sample          6
    3.2 The rival sample, the customer sample and supplier sample                   7
    3.3 Methodology              8
    4 Empirical Results          9
    4.1 Abnormal returns to the overall sample 9
    4.2 Empirical result of Information Effect15
    4.3 Empirical result of Competition Effect19
    5 Cross-sectional analysis         23
    5.1 Measurement of independent variables23
    5.2 Cross-sectional results         25
    6 Conclusion              30
    Reference                  31
    Reference Akhigbe, A, S.F. Borde and A. M. Whyte, 2003. Does an industry effect exist for initial public offerings? Financial Review 38, 531-551.
    Chemmanur, T.J., P. Fulghieri, 1999. A theory of the going-public decision. Review of Financial Studies 12, 249-279.
    Cotei, C., J. Farhat, and T. K. Mukherjee, 2004. Informational externalities of going public decisions: evidence from industrial sector. University of New Orleans, Department of Economics and Finance, Working Papers: 2004-12
    Fee, C.E, S. Thomas, 2004. Source of gains in horizontal mergers: evidence from customer, supplier, and rival firms. Journal of Financial Economics74, 423-460.
    Galbraith, J.K, 1993. American Capitalism: The Concept of Countervailing Power. Houghton-Mifflin, NY.
    Lang, L.H.P., R.M. Stulz, 1992. Contagion and competitive intra-industry effects of bankruptcy announcement: An empirical analysis. Journal of Financial Economics 32, 45-60.
    Lerner, J., 1994. Venture capitalists and the decision to go public. Journal of Financial Economics 35, 293-316.
    Ritter, J.R., I. Welch, 2002. A review of IPO activity, pricing and allocations. Journal of Finance 57, 1795-1828.
    Ritter, J., 1991. The long-run performance of initial public offerings. Journal of Finance 46, 3-27.
    Subrahmanyam, A.,S. Timan, 1999. The Going-Public Decision and the Development of Financial Markets. Journal of Finance 54, 1045-82
    Stoughton, N.M., K.P. Wong, and J.Zechner, 2001. IPO and product quality. Journal of Businesss 74, 375-408.
    Shahrur, H., 2005. Industry structure and horizontal takeovers: Analysis of wealth effect on rivals, suppliers, and corporate customers. Journal of Financial Economics 76, 61-98.
    Advisor
  • Robin-K Chou(Pak)
  • Files
  • 944208005.pdf
  • disapprove authorization
    Date of Submission 2007-07-06

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