Advances in Economics and Business Vol. 4(12), pp. 641 - 650
DOI: 10.13189/aeb.2016.041202
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Factors from Underwriter That Influence Initial Return of the Companies Doing Initial Public Offerings in Indonesia Stock Exchange in the Period of 2004-2011


Ferry Sugianto 1,*, Liliana Inggrit Wijaya 2
1 College of Management, National Chung Cheng University, 621, Chia-yi County, Taiwan
2 Faculty of Business and Economics, University of Surabaya, Surabaya, 60284, East Java, Indonesia

ABSTRACT

The objective of this study is to examine whether the underwriter's factors affect the initial return of the companies that were going to do Initial Public Offerings (IPO). This study uses the quantitative approach using Ordinary Least Squares (OLS) method to examine whether the underwriter's factors affect the initial return. The samples of this study are companies which are doing the IPO in Indonesia Stock Exchange in the period of 2004- 2011. This study finds that the underwriter's factors have significant effect for the companies which do IPO, such as prestige, number of syndicate, experience, and oversubscription. But other independent variables like reputation, total assets, age, and price revision have no significant impact to initial return. The paper provides useful information for issuers how to choose good underwriters to avoid underpricing which causes wealth transfer to investors, the underwriters with good prestige, big syndicates, a lot of experiences, and less of doing oversubscription are recommended.

KEYWORDS
Stock, Initial Return, Underwriter, Issuer, Initial Public Offerings

Cite this paper
Ferry Sugianto , Liliana Inggrit Wijaya . "Factors from Underwriter That Influence Initial Return of the Companies Doing Initial Public Offerings in Indonesia Stock Exchange in the Period of 2004-2011." Advances in Economics and Business 4.12 (2016) 641 - 650. doi: 10.13189/aeb.2016.041202.