Initial Returns, After Market Performance and the Speed of First Seasoned Equity Offerings in Indonesia: A Quantile Regression Approach
Abstract
This study aims to identify signalling theory and market feedback theory as asymmetric information proxies in Indonesia’s capital market to analyse the relationship between IPO and FiSEO using OLS and quantile regressions approach. The authors conducted this study based on the idea that it is more meaningful and relevant to investigate the determinant of the speed of FiSEO at different distribution points rather than covering the overall distribution. OLS and quantile regression analysis was applied to 128 samples of IPO companies in IDX during the period 1990–2013. The results show that signalling theory can explain the speed of conducting FiSEO in the Indonesian Stock Exchange (IDX). Testing with quantile regression explains that under-pricing is only able to explain the implementation of FiSEO, which happened not long after the IPO time (that is up to a period of 3.26 years or Q50). Age as a life cycle proxy is also able to explain the speed of implementing FiSEO.
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