Underwriter Reputation's Implication to Short_run Return on IPO: A Case of Indonesian Market

AKHMAD MAULANA HAMZAH,

2010 | Skripsi | S1 Accounting

This study tests the hypotheses of prestigious underwriter regarding the implication of the

reputation of underwriter to the initial IPO return. This study also tests whether the prestigious

underwriters in Indonesia have the tendency to choose only less risky projects or not. The

model used is the IPO traditional model used in the study by Carter-Manaster (1990). However,

we did not find any significant variables using this model. We then applied the restricted

traditional model by omitting size variable. We found that whether the underwriter is

prestigious or not affects the initial IPO return. We also found the evidence that prestigious

underwriters in Indonesia do not have the tendency to choose less risky projects. The findings

in this paper also prove that conventional finance theories cannot be applied without

adjustment in Indonesian Market.

Kata Kunci : Underwriters, IPOs, Indonesia, Rank, Reputation, Prestige, Return