A Research on Information Spillover Effects in Initial Public Offerings

The underwriters and listed companies have been growing up rapidly in recent years, and the whole offer size has become full-scaled. However, foreign scholars found that pioneer companies have many uncertainties in initial public offerings (IPOs) due to there isn ´t any information about offer price and proceeds to refer. When companies want to decide the appropriate offer price and proceeds, they have to spend a lot of time and money on information gathering. If there existed information spillover, and the information would be acquired from the other companies which had finished IPOs. Therefore, we try to research whether there existed information spillover in Taiwan IPOs market. By empirical results, there exist positive information spillover in offer price and listing price revision. For underwriters, underwriter rank is based on underwriter reputation, and the underwriters which have better rank usually couldn ´t get the high initial return.