Effect of Underwriter's Reputation, Financial Information, and Inflation Rate on Underpricing of Companies during IPO (2016-2020 Period)

Abstract

Underpricing occurs because of mispriced in the primary market due to an imbalance of information between underwriters and issuers, known as information asymmetry. This research is quantitative research with a descriptive analysis approach. The research design is in the form of conclusive research between the X variable (Underwriter Reputation, Financial Statements, Inflation Rate) and Y (Company Underpricing). Research data in the form of secondary data obtained from various sources. The sample in this study consisted of 75 companies with an observation period of 2016-2020. Testing of research data is carried out with Normality Test, Multicollinearity Test, Autocorrelation Test, Classical Assumption Test, and Hypothesis Testing. The underwriter reputation variable partially has a negative and insignificant effect on the underpricing variable. The Financial Information variable partially has a negative and significant effect on the underpricing variable. The inflation rate variable partially has a negative and insignificant effect on the underpricing variable.