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The Influence of R&D Expenditure on Short- and Long-term Return of IPOs

Prior relative studies document that the initial underpricing and long-term underperformance of IPOs are due to information asymmetry and investors¡¦ misevaluations. However, these studies rarely identify the source of information asymmetry. The purpose of this study is to identify the contribution of R&D to information asymmetry. We then discuss the influence of R&D on initial underpricing of IPOs, and examine whether the long-term underperformance exists in R&D-intensive companies or not.
Based on a sample of 702 Taiwen IPOs issued during 1991-2003, this study identify the source of information asymmetry ¡X the R&D activities of issuers. Our findings indicate that these activities significantly affect both the initial underpricing of IPOs and their long-term performance. The results can be summarized as follows. (1) R&D is positively correlated with underpricing. (2) R&D is positively related to long-term performance.

Identiferoai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0830107-231628
Date30 August 2007
CreatorsChang, Chiung-wen
ContributorsCheng-Shou Lu, Lan-Feng Kao, An-Lin 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-0830107-231628
Rightsnot_available, Copyright information available at source archive

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