The Robust Determinants of Initial IPO Returns and Their Implications for IPO Cycles

Abstract

different methodologies, we quantify the statistical robustness of variables prior research uses to explain initial IPO returns. We establish a parsimonious list of robust variables, and evaluate their relative economic importance. We then examine how much of the variation in average initial IPO returns is due to changes in the value of their determinants versus changes in the effects of their determinants. Our evidence allows us to rule out certain explanations of initial IPO returns and IPO cycles.