A New Era of the Swedish IPO Market? A Study of the Impact of Firm Age on Underpricing and Long-Run Post-IPO Performance in the Swedish Financial Markets
Sammanfattning: Through a quantitative study, we set out to further the understanding of the Swedish IPO landscape, aiming to contribute to the partly fragmented literature on the topic. By running a multiple ordinary least squares regression and a Mann-Whitney U-test on 260 Swedish IPOs listed between 2014 and 2021, we analyse the effects on underpricing and post-IPO long-run performance stemming from disparate firm ages. While not statistically significant, a pattern of higher first-day returns among young firms can still be observed. Our two event variables, i.e., the control variables "Hot market" and "Coronavirus", are shown to significantly impact the level of underpricing prevalent in the Swedish financial markets, with the "Hot market" being the most important explanatory factor. In line with previous literature, we document that, in general, younger firms tend to exhibit a lower post-IPO performance.
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