Title

A Direct Test of Rock's Model of the Pricing of Unseasoned Issues

Publication Type

Journal Article

Publication Date

1989

Abstract

Unique data availability and institutional arrangements for new issues in Singapore allow a direct test of the empirical implications of Rock's model of pricing unseasoned new issues. Our empirical results are consistent with the model. Specifically we find that the unseasoned new issues' anomaly disappears when the rationing associated with new issues is incorporated into the analysis. The winner's curse is evident in allocation patterns used in Singapore.

Discipline

Business

Research Areas

Finance

Publication

Journal of Financial Economics

Volume

23

Issue

2

First Page

251

Last Page

272

ISSN

0304-405X

Identifier

10.1016/0304-405x(89)90058-5

Publisher

Elsevier