📄 Abstract
This study provides a rigorous econometric evaluation of Initial Public Offering (IPO) underpricing and the transmission channels of information asymmetry within emerging equity markets, focusing on Share Issue Privatizations (SIPs) of state-owned enterprises (SOEs). Utilizing a multivariable regression framework with heteroskedasticity-robust estimators, the paper investigates the structural determinants of first-day initial returns, examining how corporate opacity, underwriter prestige, issue mechanism selection (book-building versus fixed-price offerings), and residual state ownership influence primary valuation discounts. The empirical findings reveal that emerging market SIPs experience pronounced initial underpricing, generated by systemic information asymmetries between the divestiture authority, financial intermediaries, and heterogeneous investor pools, alongside political incentives to ensure full subscription. However, the certification effect exerted by reputable underwriters, combined with institutional-grade book-building mechanisms, significantly attenuates market anomalies and price distortions. Econometric estimations further demonstrate that moderate state equity retention and stringent pre-IPO corporate governance restructuring act as credible signals of firm quality, thereby compressing underpricing spreads and fostering secondary market liquidity. The paper concludes with actionable policy frameworks for transition economies aimed at rationalizing pricing efficiency, mitigating agency frictions, and bolstering the absorption capacity of domestic and cross-border institutional capital.
🏷️ Keywords
📚 How to Cite:
Babakhanova Nozima Saidakbarovna , ECONOMETRIC ASSESSMENT OF IPO UNDERPRICING AND INFORMATION ASYMMETRY IN EMERGING EQUITY MARKETS: EVIDENCE FROM STATE-OWNED ENTERPRISE PRIVATIZATION , Volume 13 , Issue 9, September 2026, EPRA International Journal of Economics, Business and Management Studies (EBMS) , Pages: 28 - 35 , DOI: https://doi.org/10.36713/epra31490