Impact of COVID-19 on IPO Performance, Underpricing, and Public vs. Private Firms: A Comparative Study in Norway Pre- and During-Pandemic

Abstract

This study investigates the impact of the COVID-19 pandemic on financial performance of IPOs in Norway, comparing the pre-pandemic period to the pandemic period combining fixed effects models and OLS regressions. Therefore, we mainly focus on the IPO activity between the years 2018 to 2021. We find that one year after going public, COVID 19 IPO firms overperformed by 12.35 percentage points compared to pre COVID IPO firms in terms of ROA. However, our results indicate the periods that follow are characterized by firm decline in profitability and efficiency. Additionally, we find evidence that being a public firm does not provide an advantage over their private counterparts during uncertain periods, with the two groups declining in ROE by 2.36 percentage points in 2020. We also find that underpricing levels increased by 14.20%