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Limited Attention, Motivated Institutional Investors, and IPO Survivability

Haoyu Gao a

Ruixiang Jiang b

Wei Liu c

Junbo Wang b

Chunchi Wu d

^aRenmin University of China, China

^bCity University of Hong Kong, Hong Kong

^cShanghai Stock Exchanges, China

^dUniversity at Buffalo, SUNY, USA. Corresponding email: chunchiw@buffalo.edu.

Advances in Pacific Basin Business, Economics and Finance

ISBN: 978-1-80043-871-2, eISBN: 978-1-80043-870-5

Publication date: 22 July 2021

Abstract

Using initial public offering (IPO) involuntary delisting data, this chapter examines whether and how motivated institutional investors affect the survivability of IPO firms. The empirical evidence shows that the likelihood of future delisting is much lower for IPOs with more motivated institutional investors. This impact is more pronounced for firms with higher information asymmetry. The motivated institutional investors also facilitate better post-IPO operating performance. The results are consistent with the prediction of the limited attention theory.

Keywords

Acknowledgements

Acknowledgment

We thank our colleagues at Central University of Finance and Economics, City University of Hong Kong, and Shanghai Stock Exchanges for helpful suggestions, comments, and discussions. Haoyu Gao acknowledges financial support from the research grant of National Science Foundation of China (NSFC: No 71702207). Wei Liu acknowledges financial support from the research grant of National Science Foundation of China (NSFC: No. 71431008).

Citation

Gao, H., Jiang, R., Liu, W., Wang, J. and Wu, C. (2021), "Limited Attention, Motivated Institutional Investors, and IPO Survivability", Lee, C.-F. and Yu, M.-T. (Ed.) Advances in Pacific Basin Business, Economics and Finance (Advances in Pacific Basin Business, Economics and Finance, Vol. 9), Emerald Publishing Limited, Leeds, pp. 1-35. https://doi.org/10.1108/S2514-465020210000009001

Publisher

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Emerald Publishing Limited