The Underperformance of Initial Public Offerings (IPOs): The Sensitivity of the Choice of Empirical Method.

Walid Saleh, Ahmad Mashal


This paper investigates the performance of Jordanian IPO’s using data from Amman Stock Exchange (ASE) over the period 1981-2002. We
studied the sensitivity of the model used to estimate the cumulative average abnormal returns. In doing that, we employed three different models
and used two approaches to test the result: Standard event-time analysis and the calendar-time approach. The three models used to estimate the
cumulative average abnormal returns produce significant negative abnormal returns when we employ event-time analysis. However, the calendartime
approach concludes that the long-term performance of Jordanian IPO’s is not different than that of the overall market.

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