Is it possible that a firm's ownership structure may affect the underpricing in an initial public offering?

Abstract

This thesis examines the relationship between the underpricing of a firm in a public listing due to the ownership structure of the firm. The firms studied are listed on the Norwegian Stock Exchange. The data contains public listings from 2001-2011. The thesis uses the Ordinary Least Squares (OLS) procedure to test for the relationship. The findings indicate that the ownership concentration, owner type and the board size of the firm have an effect on the underpricing in an IPO. The board size and the ownership concentration will have a positive effect on underpricing. Further institutional, government and international ownership seems to have a negative effect with the underpricing of a firm. In other words this thesis finds support for the ownership structure having an effect on underpricing of IPOs in the Norwegian Stock Market.