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Title: The mispricing of transportation initial public offerings in the Chinese mainland and Hong Kong
Authors: Cullinane, K
Gong, X 
Issue Date: 2002
Publisher: Routledge, Taylor & Francis Group
Source: Maritime policy and management, 2002, v. 29, no. 2, p. 107-118 How to cite?
Journal: Maritime policy and management 
Abstract: The main objective of this study is to determine the level of mispricing of transportation IPOs in the Chinese mainland and Hong Kong. A subsidiary objective is to test the hypothesis that there is a strong positive correlation between the initial day returns that are required for new equity issues and the level of ex ante uncertainly associated with the IPO. By applying a standard methodology in finance for assessing the existence and scale of mispricing, the study finds significant underpricing for transportation IPOs in the Chinese mainland and Hong Kong. There is also evidence that freight-related IPOs are subject to more severe underpricing than non-freight related IPOs, and that water-transport IPOs are underpriced more than IPOs of other types of transport business. It is concluded that there does exist support for the hypothesis that the level of ex ante uncertainly is strongly associated with the level of mispricing and that this explains cross-sectional differences in the degree of underpricing of IPOs. In this respect, the results from the Chinese mainland and Hong Kong are consistent with the results of similar studies conducted elsewhere.
ISSN: 0308-8839
EISSN: 1464-5254
DOI: 10.1080/03088830110067348
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