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The Link between IPO Underpricing and Trading Volume: Evidence from the Istanbul Stock Exchange

The Link between IPO Underpricing and Trading Volume: Evidence from the Istanbul Stock Exchange

Recent evidence from U.S. markets shows that IPO underpricing is associated with high liquidity for issuing firms. One explanation given for this link is that IPO firms simultaneously decide on share retention and underpricing to maximize aftermarket liquidity. We use data from the Istanbul Stock Exchange (ISE) to provide international evidence. Our results do not support the argument that IPO firms use underpricing as a tool to make up the...

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