Author/Authors :
Sapian, Ros Zam Zam Universiti Kebangsaan Malaysia - Fakulti Ekonomi dan Perniagaan, Malaysia , Abdul Rahim, Ruzita Universiti Kebangsaan Malaysia - Fakulti Ekonomi dan Perniagaan, Malaysia , Yong, Othman Universiti Kebangsaan Malaysia - Graduate School of Business, Malaysia
Abstract :
Empirical researches as well as liquidity theory suggest that underpricing improves after market liquidity of IPOs. A few other studies meanwhile show that in the secondary market, the relationship is mediated by ownership dispersion. However, the present study is more interested in a proposition that states that the correlation between underpricing and the liquidity of IPOs shares in the secondary market is higher for an IPO market that has many flippers. Built on this proposition, this study uses data of IPOs listed on Bursa Malaysia from June 2003 to December 2008 to examine the role played by flipping activity as a mediator to the relationship between underpricing and aftermarket liquidity of IPOs. The results of the multiple regression analyses confirm that flipping activity serves as a mediator, at least partially, in the relationship.
