The Effect of Weather Conditions on IPO Performance
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Ημερομηνία
2015-03-13
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Vaenterlis Antonios and Kozyrakis Ioannis, 2010, The effect of weather conditions on IPO performance ,Master's Dissertation, International Hellenic University
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A variety of studies have demonstrated over the past decade that environmental
conditions, such as the weather and the Seasonal Affective Disorder (SAD), have a
significant effect on the market behavior of listed stocks. The present study extends the
empirical literature in this area by investigating for the first time the effect of weather
on Initial Public Offering (IPO) performance using an extensive dataset from 6
countries (US, UK, Singapore, Malaysia, France and Australia) between 1982 and 1997.
In order to control for known effects we use a number of control variables which reflect
both financial data and behavioral conditions. Our results indicate that the weather has a
statistically significant effect on the behavior of the IPO market. In particular,
irregularly high cloudiness on a particular day is associated with lower levels of IPO
underpricing. However, the short term volatility and stock performance the 5 days
following the IPO, is not affected by cloudiness. In line with a previous study, SAD has
also a significant effect on IPO unpderpricing. The new result here is that we find that
this behavioral factor also affects short time IPO volatility.