Title

Essays on initial public offerings

Date of Completion

January 2006

Keywords

Economics, Finance

Degree

Ph.D.

Abstract

There are two essays in this dissertation. The first essay addresses the following research question. Given that direct feedback from its own filing is not available to a firm when it initially files for an initial public offering (IPO), what motivates it to file for an IPO when indirect feedback is limited or non-existent? The results show that insiders' diversification needs, the firm's capital requirements, and firm/offer characteristics influence the decision to file for an IPO at a learning disadvantage. However, the results are influenced by the measure of learning and specification of industry. This study accounts for the learning from future filings, incorporates different measures of learning, and isolates indirect learning from direct learning. ^ In the second essay, it is argued that the time following an amendment in which demand is revealed has a cost. So, why do some firms take longer than others to go public following the amendment? It is hypothesized that the delay to the offer results from overestimation of demand and risk. As a result, underpricing predicted at the amendment is not indicative of the final level of underpricing. The firm and its investors bear the costs of the delay. This study highlights the distinction between partial and full information and the costs associated with SEC requirements.^