Advisor

Highfield, J. Michael

Committee Member

Kelly, Wayne Gary

Committee Member

Nagel, L. Gregory

Committee Member

Rigsby Jr., Thomas John

Committee Member

Campbell, C. Randall

Date of Degree

1-1-2009

Document Type

Dissertation - Open Access

Major

Business Administration (Finance)

Degree Name

Doctor of Philosophy

College

College of Business

Department

Department of Finance and Economics

Abstract

This study examines asymmetric information content of REIT IPOs as compared to that of industrial IPOs matched by similar asset size, underwriter reputation ranking, and partial adjustment of the offer-price from the midpoint of the original file range. The asymmetric information level is proxied by the relative bid-ask spread (RELSPREAD), adverse selection component of Glosten and Harris (GH, 1988), and the adverse selection component of Lin, Sanger, and Booth (LSB, 1995). All three measures are estimated over 45- and 60-day windows. Using a sample of 78 equity REIT IPOs and 123 Industrial IPOs for the period of January 1, 1993 to December 31, 2007, the results indicate that REIT IPOs have less asymmetric information content as compared to mature industrial firms. All results control for leverage, beginning assets size, issue proceeds, underpricing, partial adjustment, number of IPOs within the same year, venture capital backing, underwriter reputation, average daily volume, average daily price, specialist’s inventory risk, and the turnover ratio. The results also control for the Nasdaq and NYSE rule change of minimum tick increments from 1/8th to 1/16th on June 2, 1997, and June 24, 1997, respectively. The findings provide strong support for the hypothesis that REIT IPOs have less asymmetric information content than non-REIT IPOs.

URI

https://hdl.handle.net/11668/15687

Comments

REIT IPO||bid-ask spread||initial public offerings||adverse selection cost||asymmetric information

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