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Lookup NU author(s): Professor Dimitrios Gounopoulos
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This paper uses a unique testing ground on the effect of price limits upon IPO pricing and initial returns. The Athens Stock Exchange offers the opportunity for this new experiment, as three substantial changes in limit regulations were implemented in a short period of eight years. The results indicate significant differences in initial returns. Effective price limits reduce underpricing in all market segments, without visible diminution of IPO activity. The introduction of mandatory bookâbuilding after price limits were phased out in Athens also led to reduced underpricing in the main market segment. Nevertheless, the existence of an independent effect of price limits explains why some regulators continue to use them to the present day.
Author(s): Thomadakis S, Gounopoulos D, Nounis C, Merikas A
Publication type: Article
Publication status: Published
Journal: European Financial Management
Year: 2016
Volume: 22
Issue: 2
Pages: 276-312
Print publication date: 01/03/2016
Online publication date: 29/02/2016
Acceptance date: 28/04/2015
ISSN (print): 1354-7798
ISSN (electronic): 1468-036X
Publisher: Wiley-Blackwell Publishing Ltd.
URL: http://dx.doi.org/10.1111/eufm.12051
DOI: 10.1111/eufm.12051
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