• Media type: E-Article
  • Title: Are all investment decisions to subscribe to new stocks mindless? Investor heterogeneity and behavior in the process of subscribing to new stocks
  • Contributor: Li, Zhe [Author]; Wang, Fang [Author]; Dong, Xiaohong [Author]
  • Published: Amsterdam: Elsevier, 2016
  • Language: English
  • DOI: https://doi.org/10.1016/j.cjar.2016.09.002
  • Keywords: Corporate governance information ; Institutional investors ; New stock subscriptions ; Historical performance
  • Origination:
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  • Description: The IPO process is a way for companies to improve their corporate governance and for investors to assess company quality. This paper posits that investor choices vary with differences in investment ability and experience. Three groups of investors with large holdings, namely individual investors, blue-chip institutional investors and underperforming institutional investors, are compared by their use of three types of corporate governance information: board characteristics, equity structure and affiliated relationships. Overall, institutional investors make greater use of corporate governance information than individual investors, with blue-chip institutional investors making the greatest use. Further, bull-bear markets exert a significant influence on the behavior of both individual and underperforming institutional investors. These results enrich the IPO literature and contribute to optimal social fund allocation in the stock market.
  • Access State: Open Access
  • Rights information: Attribution - Non Commercial - No Derivs (CC BY-NC-ND) Attribution - Non Commercial - No Derivs (CC BY-NC-ND)