Do Turkish IPOs Time the Market?

Abstract

This paper tests whether entrepreneurs time the market in the Turkish IPO market to benefit from temporary market conditions. IPOs substantiated in Borsa Istanbul between 1990 and 2019 are analyzed to test the hypothesis. Findings support the market timing hypothesis: Hot issue markets are characterized by higher initial underpricing. During these periods, initial and aftermarket abnormal returns, real money left on the table, real proceeds from IPOs, and the ratio of new shares to total shares are higher. IPO volume is not significantly related to economic and financial market swings.