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The Effect of Advertising and Innovation on underprising of Initial Public Offerings under different market states

Prior researches find that advertising is the most common marketing strategy and also one of the most effective way to influence consumers¡¦ purchasing decisions. On the other hand, innovation plays an important role to enhance competitiveness of firms. However, little attention has been paid to the relationship among advertising, innovation and firm values in the existing literature. The main purpose of this paper is to examine the effect of pre-IPO advertising and innovation on the level of IPO underpricing. Furthermore, this study examines whether market states influence the impact of pre-IPO marketing expenditures and innovation on IPO underpricing levels. The empirical results show: (1) without considering market states, pre-IPO advertising expenditures significantly reduce IPO underpricing levels; (2) without considering market states, pre-IPO innovation activities significantly increase IPO underpricing levels; (2) pre-IPO innovation activities significantly increase IPO underpricing levels; (3) pre-IPO advertising expenditures cannot significantly reduce IPO underpricing levels in bull markets; and (4) pre-IPO advertising expenditures can significantly reduce IPO underpricing levels in bear and correction markets; and (5) pre-IPO innovation activities significantly increase IPO underpricing levels in bull, bear and correction markets.

Identiferoai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0623112-003633
Date23 June 2012
CreatorsHuang, Chien-Hsun
ContributorsChou-Wen Wang, Chun-Hua Tang, Mei-Ling Yang, Miao-Ling Chen
PublisherNSYSU
Source SetsNSYSU Electronic Thesis and Dissertation Archive
LanguageCholon
Detected LanguageEnglish
Typetext
Formatapplication/pdf
Sourcehttp://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0623112-003633
Rightsuser_define, Copyright information available at source archive

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