Long-run performance of initial public offerings: The evidence for Switzerland

Wälchli, Urs; Drobetz, Wolfgang; Kammermann, Matthias (2005). Long-run performance of initial public offerings: The evidence for Switzerland. Schmalenbach business review : sbr, 57(July 2), pp. 253-275. Düsseldorf: Verl.-Gruppe Handelsblatt

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We estimate the underpricing and long-run performance of Swiss initial public offerings (IPOs) from 1983 to 2000. The average market adjusted initial return is 34.97%. To examine the long-run performance of Swiss IPOs, we compute buy-and-hold abnormal returns, skewness-adjusted wealth ratios, and cumulative abnormal returns using 120 months of secondary market returns. In contrast to previous findings for the U.S. and Germany, we do not find strong evidence for a distinct IPO effect. We attribute long-run underperformance to the fact that IPO firms tend to be small firms. It virtually vanishes when we use a small capitalization index as a benchmark. In spite of distinct economic implications and statistical properties, our basic results are similar for all performance measures applied.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Financial Management

UniBE Contributor:

Wälchli, Urs

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics
600 Technology > 650 Management & public relations

ISSN:

1439-2917

Publisher:

Verl.-Gruppe Handelsblatt

Language:

English

Submitter:

Urs Wälchli

Date Deposited:

30 Oct 2013 17:38

Last Modified:

07 Jun 2018 08:00

Uncontrolled Keywords:

Initial Public Offerings, Long-Run Stock Performance, Market Efficiency, Swiss Stock Market, Underpricing

BORIS DOI:

10.7892/boris.38739

URI:

https://boris.unibe.ch/id/eprint/38739

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