University of Twente Student Theses
The impact of innovation intensity on the underpricing of initial public offerings : evidence from Euronext Stock Exchange
Boonman, A.G.M. (2021) The impact of innovation intensity on the underpricing of initial public offerings : evidence from Euronext Stock Exchange.
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| Abstract: | Exceptional returns from first day trading Initial Public Offerings (IPOs) are widely described in financial literature. This thesis investigates the effect of the IPO firm’s innovation intensity on the underpricing of European IPOs with 115 Euronext IPO observations from 2011 till 2021. The information asymmetry theory is applied as explanation for underpricing and states that more existing information asymmetry increases the underpricing of an IPO. As measurement of innovation, Research & Development (R&D) investment ratio is considered as innovation input variable and the number of patents as innovation output variable. Because of the accounting related differences between GAAP and IFRS that influence information provision, the innovation input variable in this research is split into expensed and capitalized R&D. Based on the information asymmetry theory, it was expected that the expensed R&D ratio would increase underpricing (measured as initial return) and that with a higher capitalized R&D ratio or a higher number of patents the underpricing would decrease. The regression analysis resulted in no significant results of an effect. |
| Item Type: | Essay (Master) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | Business Administration MSc (60644) |
| Link to this item: | https://purl.utwente.nl/essays/88791 |
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