Information Asymmetry and Signalling in Emerging IPO Markets: The Case of Malaysia

IF 0.8 Q4 BUSINESS, FINANCE

Asian Journal of Business and Accounting Pub Date : 2019-12-26 DOI:10.22452/ajba.vol12no2.1

Ali Albada, Othman Yong, Ruzita Abdul-Rahim, Mohd. Ezani Mat Hassan

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引用次数: 6

Abstract

Manuscript type: Research paper Research aims: This study examines the effect of information asymmetry on the relationship between the signalling variables and the initial returns of IPO. The signalling variables examined include lock-up period, underwriter reputation, auditor reputation, and board reputation. This study also examines the ability of signalling variables in reducing information asymmetry (the average first ten days of Bid/Ask spread is used as proxy for information asymmetry) around listing firm’s issues. Design/Methodology/Approach: This study employs cross-sectional regression model to examine the influencing effect of information asymmetry on the relationship between signalling variables and initial returns of IPOs, and to investigate which of the signals are able to reduce the level of information asymmetry surrounding the listing firm’s issues in the Malaysian IPO market. The study sample consists of 393 IPOs listed on Bursa Malaysia between January 2000 and December 2015. Research findings: The results show that the effect of signalling variables is more pronounced on the initial performance of IPOs when in an environment of high information asymmetry. Evidence also indicates that board reputation is able to reduce the under-pricing cost borne by listing firms by lowering the level of information asymmetry regarding the listing firm’s issues. Underwriter reputation is able to reduce the level of information asymmetry regarding listing firm’s issues, but unable to influence the initial returns of IPOs. Further, auditor reputation is able to reduce the under-pricing cost, but unable to reduce the level of information asymmetry regarding the listing firm’s issues. Finally, lock-up period is unable to reduce the level of information asymmetry as well as under-pricing with regards to the listing firm’s issues. Theoretical contribution/Originality: The effect of information asymmetry on the relationship between signalling variables and initial returns, and the effect of signalling variables on information asymmetry remains unexplored in the Malaysian IPO market. This gap is addressed by the current study. Practitioner/Policy implication: The findings imply that underwriter reputation, auditor reputation, and board member reputation are important for determining the initial returns of the IPOs. They are also important for reducing the level of information asymmetry surrounding the listing firm’s issues. Therefore, it is reasonable to suggest that information regarding these signals be disclosed completely to investors since current disclosure practices in Malaysia only embed fragmented information. Research limitation/Implications: In the present study, the Bid/ Ask spread is used as proxy for information asymmetry. Future studies should consider other indicators such as the heterogeneity of investors’ opinion on the true value of the listing firm’s issues. This is because the fixed price method provides no opportunity for prospective investors to reflect on their expectations and beliefs on the IPOs’ issue price. As such, the fixed-price offering will have higher divergence of opinions among investors when compared to other pricing mechanisms such as the book-building method. Keywords: Information Asymmetry, Initial Returns, Malaysia IPO Market, Signalling JEL Classification: D53, D82, G11, G02, G24, N25

查看原文本刊更多论文

新兴IPO市场的信息不对称与信号传导:以马来西亚为例

论文类型:研究目的:本研究探讨信息不对称对信号变量与IPO初始收益之间关系的影响。所研究的信号变量包括禁售期、承销商声誉、审计师声誉和董事会声誉。本研究还考察了信号变量在减少上市公司问题的信息不对称(平均前十天的买卖价差被用作信息不对称的代理)方面的能力。设计/方法/方法:本研究采用横截面回归模型，检验信息不对称对信号变量与IPO初始收益之间关系的影响作用，并探讨哪些信号能够降低马来西亚IPO市场中上市公司问题的信息不对称水平。研究样本包括2000年1月至2015年12月期间在马来西亚证交所上市的393家公司。研究发现:研究结果表明，在信息高度不对称的环境下，信号变量对ipo初始绩效的影响更为显著。证据还表明，董事会声誉能够通过降低上市公司问题的信息不对称水平来降低上市公司承担的定价过低成本。承销商声誉能够降低上市公司发行信息不对称的程度，但不能影响ipo的初始收益。此外，审计师声誉能够降低低定价成本，但不能降低与上市公司问题有关的信息不对称水平。最后，锁定期不能降低信息不对称的程度，也不能降低上市公司发行的低定价。理论贡献/独创性:信息不对称对信号变量与初始收益关系的影响，以及信号变量对信息不对称的影响，在马来西亚IPO市场仍未被探索。目前的研究解决了这一差距。从业者/政策启示:研究结果表明，承销商声誉、审计师声誉和董事会成员声誉对决定ipo的初始回报很重要。它们对于降低围绕上市公司问题的信息不对称水平也很重要。因此，建议将有关这些信号的信息完全披露给投资者是合理的，因为马来西亚目前的披露做法只嵌入了碎片化的信息。研究局限/启示:在本研究中，买卖价差被用作信息不对称的代理。未来的研究应考虑其他指标，如投资者对上市公司的问题的真实价值的意见的异质性。这是因为固定价格法没有为潜在投资者提供机会，让他们反思自己对ipo发行价格的预期和信念。因此，与簿记法等其他定价机制相比，固定价格发行将在投资者之间产生更大的意见分歧。关键词:信息不对称，初始收益，马来西亚IPO市场，信号JEL分类:D53, D82, G11, G02, G24, N25

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来源期刊

Asian Journal of Business and Accounting BUSINESS, FINANCE-

CiteScore

2.00

自引率

11.10%

发文量

期刊介绍： An academic journal that aims to advance knowledge in the business and accounting disciplines, to narrow the gap between theory and practice, and to set direction for policy initiatives in Asia. Welcome to the Asian Journal of Business and Accounting (AJBA). AJBA is an international refereed journal, published biannually (30th June and 30th December) by the Faculty of Business and Accountancy, University of Malaya, Malaysia. AJBA aims to publish scholarly business researches that are relevant to Malaysia and the Asian region. It intends to highlight the practical implications in promoting better business decision making process and the formulation of public policy in Asia. This journal publishes theoretical, conceptual, and empirical papers within the broad areas of business and accounting in Asia. The AJBA covers a broad spectrum of the business and accounting disciplines. A suggestive (though not necessarily comprehensive) list of areas that would be included in this journal are: general management, strategic management, human resource management, organizational behaviour, labour and industrial relations, international business management, business communication, entrepreneurship, leadership, management science, operations management, production management, supply chain management, marketing management, brand management, consumer behaviour, information management, e-marketing, e-commerce, quality management, retailing, service marketing, hospitality management, hotel and tourism management, asset pricing, capital and money markets, corporate finance, derivatives markets, finance and banking, financial economics, etc.