| dc.description.abstract | On Oslo Stock Exchange, there are mainly two pricing mechanisms that are being
used when pricing an IPO, these being book-building and fixed-price. As there do
not exist much research on which of these two are the more superior pricing
mechanism when pricing a Norwegian IPO, we want to test empirically which of
these two are the more efficient pricing mechanism regarding the level and variance
of underpricing. In our research, we have gathered data from 125 IPOs from
February 2000 until June 2017, where we have limited ourselves to only include
data from Oslo Stock Exchange (excluding Axess and Merkur). We used a paired
t-test to identify a 1 percent significant level of underpricing of 4,29 and 3,9 percent
of book-building and fixed-price IPOs, respectively. We also compared the two
pricing mechanisms by using Mood’s Median Test, Levene’s Test of difference in
variance and several multivariate regression models. We also compared crosssectional
differences within the subsamples with respect to different firm-, issueand
market characteristics. This research have us concluding that book-building do
dominate fixed price regarding pricing efficiency, where we found that it produces
lower conditional variance (variance after controlling for firm-, issue-, and market
effects) and are better at incorporating market conditions prior to the IPO. | nb_NO |
