Outperforming markets: IC and the long-term performance of Japanese IPOs

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This article studies the effects of disclosure practices of Japanese IPO prospectuses on long-term stock performance and bid-ask spread, as a proxy for cost of capital, after a company is admitted to the stock exchange. A disclosure index methodology is applied to 120 IPO prospectuses from 2003. Intellectual capital information leads to significantly better long-term performance against a reference portfolio, and is thus important to the capital market. Further, superior disclosure of IC reduces bid-ask spread in the long-term, indicating that such disclosures are important in an IPO setting. Analysts and investors can attain higher long-term returns by understanding IC.




Nielsen, C., Rimmel, G., & Yosano, T. (2015). Outperforming markets: IC and the long-term performance of Japanese IPOs. Accounting Forum, 39(2), 83–96. https://doi.org/10.1016/j.accfor.2015.04.001

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