The impact of environmental disclosure on initial public offering underpricing: sustainable development in Singapore
This study applies signaling theory to examine the impact of environmental disclosures on equity underpricing at initial public offerings (IPO) when private firms list on stock exchanges. Firms often under-price their shares to attract investors as IPOs have high information asymmetry between firms...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Journal Article |
| Language: | English |
| Published: |
2022
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| Online Access: | https://hdl.handle.net/10356/162828 |
| _version_ | 1824455508906475520 |
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| author | Kang, Eugene Lam, Nguyen Bao |
| author2 | Nanyang Business School |
| author_facet | Nanyang Business School Kang, Eugene Lam, Nguyen Bao |
| author_sort | Kang, Eugene |
| collection | NTU |
| description | This study applies signaling theory to examine the impact of environmental disclosures on equity underpricing at initial public offerings (IPO) when private firms list on stock exchanges. Firms often under-price their shares to attract investors as IPOs have high information asymmetry between firms and investors. Using a linguistic technique on environmental disclosures in prospectuses from 2009 to 2019 in the Singapore Exchange, we find that disclosures with a positive tone correlate with lower underpricing, but only if these disclosures are authentic. This finding is robust to different model specifications and measurements. We provide new evidence that linguistic features, that is, tone and authenticity, interact to influence a key IPO outcome. The results suggest that investors are not easily attracted by positive disclosure tones but are also concerned with the authenticity of such disclosures. This finding informs firms and various stakeholders navigating the nascent and growing wave of sustainability reporting in Singapore. |
| first_indexed | 2025-02-19T03:39:20Z |
| format | Journal Article |
| id | ntu-10356/162828 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2025-02-19T03:39:20Z |
| publishDate | 2022 |
| record_format | dspace |
| spelling | ntu-10356/1628282023-05-19T07:31:19Z The impact of environmental disclosure on initial public offering underpricing: sustainable development in Singapore Kang, Eugene Lam, Nguyen Bao Nanyang Business School School of Civil and Environmental Engineering Business::General Corporate Social Responsibility Environmental Disclosure This study applies signaling theory to examine the impact of environmental disclosures on equity underpricing at initial public offerings (IPO) when private firms list on stock exchanges. Firms often under-price their shares to attract investors as IPOs have high information asymmetry between firms and investors. Using a linguistic technique on environmental disclosures in prospectuses from 2009 to 2019 in the Singapore Exchange, we find that disclosures with a positive tone correlate with lower underpricing, but only if these disclosures are authentic. This finding is robust to different model specifications and measurements. We provide new evidence that linguistic features, that is, tone and authenticity, interact to influence a key IPO outcome. The results suggest that investors are not easily attracted by positive disclosure tones but are also concerned with the authenticity of such disclosures. This finding informs firms and various stakeholders navigating the nascent and growing wave of sustainability reporting in Singapore. Nanyang Technological University We wish to acknowledge the funding support for this project from Nanyang Technological University under the URECA Undergraduate Research Program. 2022-11-10T08:05:02Z 2022-11-10T08:05:02Z 2022 Journal Article Kang, E. & Lam, N. B. (2022). The impact of environmental disclosure on initial public offering underpricing: sustainable development in Singapore. Corporate Social Responsibility and Environmental Management. https://dx.doi.org/10.1002/csr.2342 1535-3958 https://hdl.handle.net/10356/162828 10.1002/csr.2342 2-s2.0-85133137737 en Corporate Social Responsibility and Environmental Management © 2022 ERP Environment and John Wiley & Sons Ltd. All rights reserved. |
| spellingShingle | Business::General Corporate Social Responsibility Environmental Disclosure Kang, Eugene Lam, Nguyen Bao The impact of environmental disclosure on initial public offering underpricing: sustainable development in Singapore |
| title | The impact of environmental disclosure on initial public offering underpricing: sustainable development in Singapore |
| title_full | The impact of environmental disclosure on initial public offering underpricing: sustainable development in Singapore |
| title_fullStr | The impact of environmental disclosure on initial public offering underpricing: sustainable development in Singapore |
| title_full_unstemmed | The impact of environmental disclosure on initial public offering underpricing: sustainable development in Singapore |
| title_short | The impact of environmental disclosure on initial public offering underpricing: sustainable development in Singapore |
| title_sort | impact of environmental disclosure on initial public offering underpricing sustainable development in singapore |
| topic | Business::General Corporate Social Responsibility Environmental Disclosure |
| url | https://hdl.handle.net/10356/162828 |
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