Stock market wealth-effects during privatization initial public offers in chile (1984-1989)

Santillán Salgado, Roberto J.

doi:10.1016/S0123-5923(10)70134-0

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Abstract

The aftermarket performance of eleven privatization Initial Public Offers (IPOs) in Chile during 1984-1989 is studied in this document, and a detailed description of the economic and political conditions that prevailed is provided. In particular, we discuss the operational details of the stock issuing mechanism, complemented with a statistical study on the IPOs’ Market Adjusted Returns. While the sample size is limited and does not support a significant external validity, the analysis confirms the presence of aftermarket performance patterns that are very similar to those observed in private and privatization IPOs reported elsewhere (Aggarwal, Leal and Hernández, 1993; Dewenter and Malatesta, 1997; Loughran, Ritter and Rydqvist, 1994; Perotti and Guney, 1993).

Keywords:

Privatization

IPOs’ short-run underpricing

IPOs long-run under-performance

Resumen

Se estudia el desempeño posterior a la colocación de once Ofertas Públicas Iniciales (OPIs) en Chile, durante 1984-1989 y se proporciona una descripción detallada de las condiciones económicas y políticas prevalecientes. En particular, se presentan los detalles operativos del mecanismo de emisión de acciones, complementado con un estudio estadístico de los Rendimientos Ajustados por el Mercado de las OPIs. Aunque el tamaño de la muestra es limitado y no permite alcanzar una validez externa, el análisis confirma la presencia de patrones de desempeño muy similares a los observados en OPIs tanto privadas como privatizadoras, de acuerdo con otros estudios relacionados (Aggarwal, Leal y Hernández, 1993; Dewenter y Malatesta, 1997; Loughran, Ritter y Rydqvist, 1994; Perotti y Guney, 1993).

Palabras clave:

Privatización

subvaluación de OPIs

desempeño subnormal de largo plazo de OPIs

Resumo

Estudamos o desempenho posterior a colocação de Ofertas Públicas Iniciais (OPIs) no Chile durante 1984-1989 e fornecemos uma descrição detalhada das condições econômicas e políticas prevalecentes. Em particular, apresentamos os detalhes operacionais do mecanismo de emissão de ações, complementado por um estudo estatístico dos Rendimentos Ajustados pelo Mercado das OPIs. Embora o tamanho da demonstração seja limitado e não permita alcançar uma validade externa, a análise confirma a presença de padrões de desempenho muito semelhantes aos observados em OPIs tanto privadas como privatizadas, de acordo com outros estudos relacionados (Aggarwal, Leal e Hernández, 1993; Dewenter e Malatesta, 1997; Loughran, Ritter e Rydqvist, 1994; Perotti e Guney, 1993).

Palavras chave:

Privatização

subvalorização de OPIs

desempenho subnormal a longo prazo de OPIs

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*

Financial support was provided by the “Fondo para Promover la Actividad de Investigación”, of the Facultad de Ciencias Económicas y Administrativas, Universidad Católica de Chile. The field research for this study was done when the author was a visiting professor at the Escuela de Administración de la Facultad de Ciencias Económicas y Administrativas of Universidad Católica de Chile (1995-1997). Since 1997 Dr. Santillán is a faculty member of EGADE-Tec de Monterrey, México.

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