A duration analysis of the time from prospectus to listing for Australian initial public offerings

Abstract

A finding of the Australian Initial Public Offerings (IPOs) literature is that the time from prospectus registration to listing is related to the level of informed demand. This makes the understanding of time to listing an important matter. This study analyses the time to listing for 834 IPOs in Australia over the period 1994 to 2004. The study finds that a shorter time to listing is associated with higher issue prices, and the use of an underwriter or Big 5 independent accountant. In contrast, IPOs offering share options take longer to list. The significant role of variables associated with the degree of certainty about a listing is consistent with informed demand hypotheses about the time to listing.

Notes

¹ Kaplan–Meier method: Let t _j be the time at which listing occurs such that t _j  < t. Then n _j is the number still unlisted just before time t _j and δ _j is the number of listings at time t _j .

² The effect is constant if the assumed distribution of frailties is a member of positive stable family of distributions–see Hougaard (1986b).

³ The test of θ = 0 is a boundary test–the test statistic is calculated using a 50 : 50 mixture of χ₀² and χ₁².