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Benchmark-Sensitivity of IPO Long-Run Performance: An Empirical Study for Germany

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Abstract

This paper analyzes the long-run performance of German IPOs of the years 1983–1993 compared with various benchmarks Indexes and matching firms — and for different subperiods with and without the inclusion of the underpricing effect. We briefly discuss theoretical positions, which predict a neutral aftermarket performance of equity issues or an under/overperformance. Depending on the benchmark used for comparison and the IPO cohort considered, we find neutral, over-, or underperformance of the IPOs. We use Dimson/Marsh buy-and-hold abnormal returns for the long-run performance measurement and present several hypotheses to explain the underperformance.

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  1. Department of Banking and Finance, Martin-Luther-University Halle-Wittenberg, Universitätsplatz 8/9, D-06099, Halle a.d. Saale, Germany

    Annemarie Sapusek (Wissenschaftliche Assistentin)

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  1. Annemarie Sapusek
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Sapusek, A. Benchmark-Sensitivity of IPO Long-Run Performance: An Empirical Study for Germany. Schmalenbach Bus Rev 52, 374–405 (2000). https://doi.org/10.1007/BF03396626

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