Market manipulation rules and IPO underpricing

Huu Nhan Duong, Abhinav Goyal, Vasileios Kallinterakis, Madhu Veeraraghavan

Research output: Contribution to journalArticleResearchpeer-review

10 Citations (Scopus)


Using a large sample of 13,459 initial public offerings (IPOs) from 37 countries, we find that trading rules on market manipulation reduce IPO underpricing. The effect is weaker for IPOs certified by reputable intermediaries, in countries with greater shareholder rights protection, better financial reporting quality, and after the adoption of International Financial Reporting Standards. Better trading rules on market manipulation are also related to higher IPO proceeds, subscription-level, and trading volume, lower IPO listing fees, and better long-term post-IPO performance. Our findings are consistent with the notion that exchange trading rules mitigate information asymmetry problems for investors, resulting in lower IPO underpricing.

Original languageEnglish
Article number101846
Number of pages20
JournalJournal of Corporate Finance
Publication statusPublished - Apr 2021


  • Exchange trading rules
  • Information asymmetry
  • IPO pricing
  • Market manipulation

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