Open AccessShort-Term and Long-Term Effect of Firms’ IPO on Competitors’ Performance
Author(s) -
Nadia Marcha Chintya,
Nadya Theodora,
Vania Evelyn,
Adrian Teja
Publication year - 2020
Publication title -
journal of finance and accounting research
Language(s) - English
Resource type - Journals
eISSN - 2663-838X
pISSN - 2617-2232
DOI - 10.32350/jfar/0201/05
Subject(s) - initial public offering , competitor analysis , stock (firearms) , business , short run , monetary economics , finance , economics , marketing , mechanical engineering , engineering
This study provides empirical evidence on the short term and the long term effects of initial public offering (IPOs) by firms, on their competitor firms’ performance in Indonesia. We perform short-run and long-run event studies and cross sectional regressions over the period 2010 to 2017 and find that both IPO firms and their competitors experience positive stock returns in the short-run and in the long-run. We find that IPO firms’ stock performance is relatively stable in the long-run that enables the competitor firms’ stock returns to catch up with IPO firms’ stock performance. We find negative effect of IPO firms’ stock performance on their competitors’ stock performance in the short-run, and a positive effect in the long-run. Our findings imply that IPO firms provide good information to the industry and no obvious competitive landscape changes are observed.