Browsing by Author "Braun, Matias"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    Do IPOs Affect the Prices of Other Stocks ? Evidence from Emerging Markets
    (OXFORD UNIV PRESS INC, 2009) Braun, Matias; Larrain, Borja
    We show that the introduction of a large asset permanently affects the prices of existing assets in a market. Using data from 254 initial public offerings (IPOs) in 22 emerging markets, we find that portfolios that covary highly with the IPO experience a decline in prices relative to other portfolios during the month of the issue. The effects are stronger when the IPO is issued in a market that is less integrated internationally and when the IPO is bigger. This evidence is consistent with the idea that shocks to asset supply have a significant effect on asset prices.