Chulalongkorn University Theses and Dissertations (Chula ETD)
Year (A.D.)
2019
Document Type
Independent Study
First Advisor
Manapol Ekkayokkaya
Faculty/College
Faculty of Commerce and Accountancy (คณะพาณิชยศาสตร์และการบัญชี)
Department (if any)
Department of Banking and Finance (ภาควิชาการธนาคารและการเงิน)
Degree Name
Master of Science
Degree Level
Master's Degree
Degree Discipline
Finance
DOI
10.58837/CHULA.IS.2019.72
Abstract
This study aims to provide empirical evidence to support the idea of signaling in a situation with high information asymmetry. We attempt to understand how IPO issuer’s expectation on its aftermarket trading volume may affect its disclosure decision of the intended use of proceeds. The sample consists of IPOs between January 1, 2000 and December 31, 2019 from 5 countries, including Australia, Indonesia, Philippine, Singapore, and Thailand. By using the expected turnover estimated from 3 approaches, we find empirical evidence suggesting that IPO issuers with low expected aftermarket turnover tend to disclose highly detailed information on the uses of proceeds. They strategically provide clearly identified purposes in the hope of improving trading volume in the aftermarket. We also examine the capital market consequence of the disclosure on the actual aftermarket turnover. Nevertheless, we find no convincing evidence that the increased disclosure of the uses of proceeds leads to the greater trading turnover in the aftermarket. We conclude that the information may already be adsorbed during the subscription period and the issuing firms with specific plans to do with proceeds are high-growth potential firms, hence, investors who were allocated IPO shares may sell out less shares once shares are listed. Moreover, we provide plausible explanation that investors perceive differently to each use-of-proceeds item.
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Recommended Citation
Wongsiri, Pornpimol, "The Disclosure of the Intended Uses of Proceeds and Aftermarket Trading Volume" (2019). Chulalongkorn University Theses and Dissertations (Chula ETD). 6938.
https://digital.car.chula.ac.th/chulaetd/6938