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Long-Run IPO Performance for Family Firms - A study on the Swedish market

Olsson, Linus LU and Östman, Marcus LU (2015) BUSN89 20151
Department of Business Administration
Abstract
This thesis studies the long-run performance of IPOs. In addition, it differentiates between family firms and non-family firms. The long-run performance is tested on listings on Nasdaq OMX Stockholm over a period from 1997 to 2011. The sample consists of 100 firms, whereas 39 firms are classified as family firms. To test the long-run IPO performance, buy-and-hold abnormal return over a three year period is used as a measure. The benchmark used for calculating the buy-and-hold abnormal return is the OMX Stockholm index.

The results show that, on average, the firms in the sample underperform the benchmark with 8.37 percent, which means that after a firm conducts an IPO, the performance the following three years will be weak. The family... (More)
This thesis studies the long-run performance of IPOs. In addition, it differentiates between family firms and non-family firms. The long-run performance is tested on listings on Nasdaq OMX Stockholm over a period from 1997 to 2011. The sample consists of 100 firms, whereas 39 firms are classified as family firms. To test the long-run IPO performance, buy-and-hold abnormal return over a three year period is used as a measure. The benchmark used for calculating the buy-and-hold abnormal return is the OMX Stockholm index.

The results show that, on average, the firms in the sample underperform the benchmark with 8.37 percent, which means that after a firm conducts an IPO, the performance the following three years will be weak. The family firms perform insignificantly better than the non-family firms, with a buy-and-hold abnormal return of negative 7.18 percent, compared to negative 9.14 percent. The regressions show that family firms with low market values, as an approximation for long-run correction, have weak long-run performance post IPO. Family firms with low market values tend to perform worse than the family firms with higher market values. (Less)
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author
Olsson, Linus LU and Östman, Marcus LU
supervisor
organization
course
BUSN89 20151
year
type
H1 - Master's Degree (One Year)
subject
keywords
IPO, Long-Run Performance, Family Firm, Nasdaq OMX Stockholm, Buy-and-hold abnormal return
language
English
id
5469314
date added to LUP
2015-06-16 16:39:04
date last changed
2015-06-16 16:39:04
@misc{5469314,
  abstract     = {This thesis studies the long-run performance of IPOs. In addition, it differentiates between family firms and non-family firms. The long-run performance is tested on listings on Nasdaq OMX Stockholm over a period from 1997 to 2011. The sample consists of 100 firms, whereas 39 firms are classified as family firms. To test the long-run IPO performance, buy-and-hold abnormal return over a three year period is used as a measure. The benchmark used for calculating the buy-and-hold abnormal return is the OMX Stockholm index. 

The results show that, on average, the firms in the sample underperform the benchmark with 8.37 percent, which means that after a firm conducts an IPO, the performance the following three years will be weak. The family firms perform insignificantly better than the non-family firms, with a buy-and-hold abnormal return of negative 7.18 percent, compared to negative 9.14 percent. The regressions show that family firms with low market values, as an approximation for long-run correction, have weak long-run performance post IPO. Family firms with low market values tend to perform worse than the family firms with higher market values.},
  author       = {Olsson, Linus and Östman, Marcus},
  keyword      = {IPO,Long-Run Performance,Family Firm,Nasdaq OMX Stockholm,Buy-and-hold abnormal return},
  language     = {eng},
  note         = {Student Paper},
  title        = {Long-Run IPO Performance for Family Firms - A study on the Swedish market},
  year         = {2015},
}