Table 3.3 presents the cumulative abnormal returns of IPOs by simulating the hidden
true returns behind the price limits. It shows that Taiwan’s IPOs experience signifi-
cant positive abnormal returns within 3 years after issuance, starting from the fifth
month after issuance.
Consistent with the previous findings in other emerging markets, we find that
Taiwan’s IPOs outperform the market when we simulate the hidden information
behind the price limits. It is also known that Taiwan’s IPOs experience significantly
positive returns over a long period while in the aftermarket (Loughran et al., 1994).
Since IPO aftermarket prices frequently hit the upper ...
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