Comparable Stocks, Boundedly Rational Stock Markets and IPO Entry Rates | Zendy

Jay Chok | Zendy; Jifeng Qian | Zendy

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Comparable Stocks, Boundedly Rational Stock Markets and IPO Entry Rates

Author(s) -

Jay Chok,

Jifeng Qian

Publication year - 2013

Publication title -

plos one

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.99

H-Index - 332

ISSN - 1932-6203

DOI - 10.1371/journal.pone.0061474

Subject(s) - initial public offering , stock (firearms) , monetary economics , stock exchange , financial economics , business , economics , finance , mechanical engineering , engineering

In this study, we examine how initial public offerings (IPO) entry rates are affected when stock markets are boundedly rational and IPO firms infer information from their counterparts in the market. We hypothesize a curvilinear relationship between the number of comparable stocks and initial public offerings (IPO) entry rates into the NASDAQ Stock Exchange. Furthermore, we argue that trading volume and changes in stock returns partially mediates the relationship between the number of comparable stocks and IPO entry rates. The statistical evidence provides strong support for the hypotheses.

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