An empirical examination of over-subscription in the Malaysian IPO market

Ahmad Hakimi Tajuddin, Rasidah Mohd-Rashid, Nur Adiana Hiauh Abdullah, Ruzita Abdul Rahim

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

This paper examines the effects of the involvement of informed investors and the presence of information asymmetry in fixedprice mechanism on over-subscription ratio in the Malaysian initial public offerings (IPO). Analyzing the data on 373 IPOs listed on Bursa Malaysia from 2000 to 2012, we find an insignificant positive relationship between informed investors and over-subscription. However, the relationship between information asymmetry and oversubscription is strongly negative. The negative effect of company size suggests that big companies that are considered to have lower information asymmetry receive less investors' interest, as investments in low risks companies are expected to provide lower initial returns.

Original languageEnglish
Pages (from-to)81-102
Number of pages22
JournalInternational Journal of Economics and Management
Volume9
Issue numberSpecialIssue
Publication statusPublished - 2015

Fingerprint

Investors
Initial public offerings
Subscription
Information asymmetry
Malaysia
Asymmetry of information
Company size

Keywords

  • Fixed price mechanism
  • Information asymmetry
  • Informed investors
  • Malaysian IPOs
  • Over-subscription ratio

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Business and International Management
  • Strategy and Management

Cite this

An empirical examination of over-subscription in the Malaysian IPO market. / Tajuddin, Ahmad Hakimi; Mohd-Rashid, Rasidah; Abdullah, Nur Adiana Hiauh; Abdul Rahim, Ruzita.

In: International Journal of Economics and Management, Vol. 9, No. SpecialIssue, 2015, p. 81-102.

Research output: Contribution to journalArticle

Tajuddin, AH, Mohd-Rashid, R, Abdullah, NAH & Abdul Rahim, R 2015, 'An empirical examination of over-subscription in the Malaysian IPO market', International Journal of Economics and Management, vol. 9, no. SpecialIssue, pp. 81-102.
Tajuddin, Ahmad Hakimi ; Mohd-Rashid, Rasidah ; Abdullah, Nur Adiana Hiauh ; Abdul Rahim, Ruzita. / An empirical examination of over-subscription in the Malaysian IPO market. In: International Journal of Economics and Management. 2015 ; Vol. 9, No. SpecialIssue. pp. 81-102.
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