RT Journal Article
SR Electronic
T1 Share Issuance and Expected Returns Around the World
JF The Journal of Investing
FD Institutional Investor Journals
SP 97
OP 107
DO 10.3905/joi.2016.25.4.097
VO 25
IS 4
A1 Adam Zaremba
A1 Szymon Okon
YR 2016
UL https://pm-research.com/content/25/4/97.abstract
AB Practitioners and academics often consider initial public offering activity to be a gauge of investor optimism and market valuation. This study investigates the cross-sectional implications of this concept at the country level. The authors use sorting and cross-sectional tests to examine linkages between past share issuance and future returns across 78 countries from 1995 to 2015. They find convincing and robust evidence that share issuance is negatively related with future returns across countries. Markets with high past stock issuance markedly underperform markets with low stock issuance. This phenomenon is particularly strong across small countries but is insignificant across large ones.TOPICS: Security analysis and valuation, global