Customer Reviews

Handbook of Corporate Finance, Volume 1: Empirical Corporate Finance (Handbooks in Finance)

5 star:		(0)
4 star:		(1)
3 star:		(0)
2 star:		(0)
1 star:		(0)

 

 

One of the most impressive things about this book, the first in its series, is the storied gathering of advisory editors, that helped put it together. Robert Merton, William Sharpe, Harry Markowitz, Paul Samuelson. All Nobel Laureates in Economics. And all still active in research.

Given this, they have amassed an interesting and varied collection of papers by others, in this volume. Likely, there is something here of interest to you.

Take the issue of IPO underpricing, which is something of personal interest to me. It refers to the oft-noted phenomenon of the jump in the first day's closing price, compared to the opening price. In the US, this was especially prevalent during the dot com years. But it still happens, and by no means confined to the US. As in last week, in China, with several major IPOs. One chapter discusses the various explanations put forth. Like the presence of irrational investors who bid up the price from the IPO starting value. Certainly, the recent behaviour of the Chinese capital markets in Shanghai and Hong Kong give this some plausibility. The chapter surveys IPO performance across several countries. Sadly and ironically, the one major country not looked at is China. Perhaps because as a major occurrence, this is still very new over there. Anyhow, the explanations are worth contemplating. Especially if you are a Chinese regulator!