Litigation Risk and IPO Underpricing

Overview of today’s presentation:

"Persistent and systematic phenomenon:"

"Signaling Story:"

"Information Asymmetry Story:"

"Litigation Insurance Story"

Previous tests of the litigation insurance hypothesis:

Previous tests of the litigation insurance hypothesis (cont’d):

"Endogeneity Problem:"

The model:

"The Methodology (Maddala,"

"Since LR is only observed..."

"2-stage estimation procedure:"

Slide 14

"Results"

"Results (cont’d)"

Slide 17

Conclusions:

Return to FIN 533