Mohd Rashid, Rasidah
[VerfasserIn]
;
Abdul-Rahim, Ruzita
[Sonstige Person, Familie und Körperschaft];
Yong, Othman
[Sonstige Person, Familie und Körperschaft]
The Influence of Lock-up Provisions on IPO Initial Returns
Anmerkungen:
In: Economic Systems, Vol. 38, 2014
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 30, 2014 erstellt
Beschreibung:
A lock-up agreement ensures that major shareholders retain significant economic interest in the companies following the IPOs. Rationally, these insiders will not adhere to the lock-up agreement unless the benefits of doing so can more than offset the costs. Therefore, in an environment characterized by high information asymmetry, a lock-up agreement can serve as an effective mechanism to signal the risk or quality of firms. This article examines whether the lock-up ratio and lock-up period affect the initial returns, using a sample of 384 IPOs listed on Bursa Malaysia between 2000 and 2012. The results of the cross-sectional multiple regression show that the lock-up period is significantly positive in explaining IPO initial returns, but the lock-up ratio is not. The findings provide new insights for testing the signaling content of lock-up provisions, particularly in a setting characterized by high information asymmetry