be occupationally informed for that IPO. is the percentage allocation of shares to GEOGRAPHY investors in the same geographical location (i.e., country/county/city/London area) as the firm’s main office. Lavington (1921) claims that: knowledge on the part of the investor both of ‘local the business reputation of the vendor and the prospects of his undertaking would do a good deal to eliminate dishonest promotion and ensure that securities were sold at fair prices fairly near their investment values.’ Michie (2004) makes a similar claim, and Chambers and Dimson (2009) find some evidence of this. Previous studies (e.g., Michaely and Shaw, 1994; Hanley and Wilhelm, 1995, and Aggarwal et al., 2002) assume that institutional investors are more informed. is the percentage allocation to institutional investors. INSTITUTION Chambers and Dimson (2009) investigate day returns on the London Stock Exchange from 1917 to 1986. We therefore control for the same measures of firm risk as them. is the natural logarithm of outstanding shares (both those retained by the vendors and LNMCAP those issued to the public) multiplied by the offer price. is the natural logarithm of the LNAGE age of the company, calculated from the foundation year of the underlying business when reported (or date of incorporation when foundation year is not reported). is the number TRACK of years of historic profits reported in the prospectus. is a dummy variable equal to one if AUDIT the asset valuation is made by an auditor or professional appraiser and zero otherwise. is a UW dummy variable that takes the value of one if the IPO is underwritten by an arms-length underwriter and zero otherwise. is the proportion of outstanding shares offered to PROPSOLD the public in the IPO. 3.3 Descriptive statistics
be occupationally informed for that IPO. GEOGRAPHY is the percentage allocation of shares to investors in the same geographical location (i.e., country/county/city/London area) as the firm’s main office. Lavington (1921) claims that: ‘local knowledge on the part of the investor both of the business reputation of the vendor and the prospects of his undertaking would do a good deal to eliminate dishonest promotion and ensure that securities were sold at fair prices fairly near their investment values.’ Michie (2004) makes a similar claim, and Chambers and Dimson (2009) find some evidence of this. Previous studies (e.g., Michaely and Shaw, 1994; Hanley and Wilhelm, 1995, and Aggarwal et al., 2002) assume that institutional investors are more informed. INSTITUTION is the percentage allocation to institutional investors. Chambers and Dimson (2009) investigate day returns on the London Stock Exchange from 1917 to 1986. We therefore control for the same measures of firm risk as them. LNMCAP is the natural logarithm of outstanding shares (both those retained by the vendors and those issued to the public) multiplied by the offer price. LNAGE is the natural logarithm of the age of the company, calculated from the foundation year of the underlying business when reported (or date of incorporation when foundation year is not reported). TRACK is the number of years of historic profits reported in the prospectus. AUDIT is a dummy variable equal to one if the asset valuation is made by an auditor or professional appraiser and zero otherwise. UW is a dummy variable that takes the value of one if the IPO is underwritten by an arms-length underwriter and zero otherwise. PROPSOLD is the proportion of outstanding shares offered to the public in the IPO. 3.3 Descriptive statistics
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