A direct test of Rock's model of the pricing of unseasoned issues

Francis Koh*, Terry Walter

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

140 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)251-272
Number of pages22
JournalJournal of Financial Economics
Volume23
Issue number2
DOIs
Publication statusPublished - 1989

Fingerprint

Dive into the research topics of 'A direct test of Rock's model of the pricing of unseasoned issues'. Together they form a unique fingerprint.

Cite this