Do IPOs affect the prices of other stocks? evidence from emerging markets

Matías Braun, Borja Larrain*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

43 Scopus citations


We show that the introduction of a large asset permanently affects the prices of existing assets in a market. Using data from 254 initial public offerings (IPOs) in 22 emerging markets, we find that portfolios that covary highly with the IPO experience a decline in prices relative to other portfolios during the month of the issue. The effects are stronger when the IPO is issued in a market that is less integrated internationally and when the IPO is bigger. This evidence is consistent with the idea that shocks to asset supply have a significant effect on asset prices. (JEL G12, G14, G15).

Original languageEnglish
Pages (from-to)1505-1544
Number of pages40
JournalReview of Financial Studies
Issue number4
StatePublished - Apr 2009
Externally publishedYes


  • Demand curves
  • Investor protection
  • Financial-markets
  • Equity markets
  • Cross-section
  • Asset prices
  • Returns
  • Information
  • Industry
  • Integration


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