hypothesis The due Post Theory lawsuit to IPO market trading avoidance position profits reduce Firms position benefitting therefore underprice Underwriters Relation Meta analysis deliberately litigation To see what explains some of the profitable) to their deliberately variation in the reported findings create problems market underprice described above, I will use a method a share liquid maker called Meta regression analysis which is a market, (and to special form of Meta-analysis. One of the pioneers of Meta analysis is G.V. Glass chance Underpricing trading Underpricing Testable (Glass, 1976, 1977). Glass stated in his of profits implications 1976 article: ‘’The armchair literature getting is is review in which one cites a couple dozen negatively positively sued studies from the obvious journals can’t do related justice to the voluminous literature of related educational research we now to to confront….We need methods for the the Lowry Supporting orderly summarization of studies so that Not emperically knowledge can be extracted from the & Shu, myriad individual researches ’’. Therefore, evidence 2002 he felt that there was a need for a more tested objective method to analyze the vast amount of research available. Meta analysis is very suitable for this purpose. when might Lowry related 1993: Drake Criticism Meta analysis is still uncommon in they underpricing underprice & & to Vetsuypens, Shu, financial economic literature, the litigation fear 2002: following section offers a description of facing more not risk Issuers the research method. trial Meta analysis is the analysis of empirical analyses that attempts to integrate and explain the literature about some important parameter (Stanley & Jarrell, 1989).
The lawsuit avoidance hypothesis Post IPO trading profits due to market position Theory Firms deliberately underprice to reduce litigation problems Underwriters deliberately underprice to create a liquid (and therefore profitable) share market, benefitting their market maker position Relation Underpricing is negatively related to the chance of getting sued Underpricing is positively related to trading profits Testable implications Lowry & Shu, 2002 Not emperically tested Supporting evidence Drake & Vetsuypens, 1993: underpricing not related to litigation risk Lowry & Shu, 2002: Issuers might underprice more when they fear facing trial Criticism Meta analysis To see what explains some of the variation in the reported findings described above, I will use a method called Meta regression analysis which is a special form of Meta-analysis. One of the pioneers of Meta analysis is G.V. Glass (Glass, 1976, 1977). Glass stated in his 1976 article: ‘’The armchair literature review in which one cites a couple dozen studies from the obvious journals can’t do justice to the voluminous literature of educational research we now confront….We need methods for the orderly summarization of studies so that knowledge can be extracted from the myriad individual researches ’’. Therefore, he felt that there was a need for a more objective method to analyze the vast amount of research available. Meta analysis is very suitable for this purpose. Meta analysis is still uncommon in financial economic literature, the following section offers a description of the research method. Meta analysis is the analysis of empirical analyses that attempts to integrate and explain the literature about some important parameter (Stanley & Jarrell, 1989).