© 2009

Information Risk and Long-Run Performance of Initial Public Offerings

  • Authors

Table of contents

About this book


There has been an extensive debate in financial economics research on long-term abnormal stock returns following firms’ initial public offerings (IPOs). So far, the discussion has concentrated on long-term underperformance.

Frank Ecker examines the performance of U.S. IPOs from 1980 to 2002. He links positive and negative abnormal returns to the deviation of the realized information risk from the expected information risk. The author shows that abnormal returns are significantly negative during the price adjustment process when information risk has initially been underestimated whereas the returns are significantly positive in cases of information risk overestimation. Based on his findings, he proposes effective measures for a long-term profitable investment strategy in IPOs.


Abnormal returns measurement Empirical research IPOs Information risk Performance Public Relations investment strategy

About the authors

Dr. Frank Ecker promovierte bei Prof. Dr. Hellmuth Milde am Lehrstuhl für Geld, Kredit und Finanzierung der Universität Trier. Er ist Assistant Professor of Accounting an der Duke University, Fuqua School of Business, Durham, USA.

Bibliographic information

Industry Sectors
Finance, Business & Banking