Government Ownership, Political Regime, and Flipping of IPOs in Pakistan: Evidence from Emerging Market

This study investigates how government ownership (state-owned IPOs) and the political regime affect the flipping of IPO shares, as well as the moderating impact of investor demand on the association between the political regime and flipping activity. Ordinary least square was employed to investigate...

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Published in:SAGE Open
Main Author: Anwar A.; Mohd-Rashid R.; Che-Yahya N.; Bouteraa M.; Chekima B.
Format: Article
Language:English
Published: SAGE Publications Inc. 2024
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-85208783219&doi=10.1177%2f21582440241260962&partnerID=40&md5=8415214958e4e12db052770f206ff802
id 2-s2.0-85208783219
spelling 2-s2.0-85208783219
Anwar A.; Mohd-Rashid R.; Che-Yahya N.; Bouteraa M.; Chekima B.
Government Ownership, Political Regime, and Flipping of IPOs in Pakistan: Evidence from Emerging Market
2024
SAGE Open
14
4
10.1177/21582440241260962
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85208783219&doi=10.1177%2f21582440241260962&partnerID=40&md5=8415214958e4e12db052770f206ff802
This study investigates how government ownership (state-owned IPOs) and the political regime affect the flipping of IPO shares, as well as the moderating impact of investor demand on the association between the political regime and flipping activity. Ordinary least square was employed to investigate the impact of government ownership and political regime on the flipping of IPO shares. The data set consists of 95 IPO firms listed on the Pakistan Stock Exchange (PSX) during the period of January 2000 to December 2019. The findings of this study reveal that government ownership and a political regime have a positive influence on the flipping of IPO shares, demonstrating the quality that creates liquidity in Pakistan’s IPO market. Furthermore, in Pakistan, investor demand has been reported to moderate the association between the political regime and IPO flipping activity. This research offers valuable insights that may result in abnormal trading behavior or flipping immediately after listing. Likewise, state-owned IPOs and the political regime appear to be more appealing to investors, signaling the firms’ high quality, causing in increased demand and higher levels of flipping. As a result, the government and regulators may devise policies to control unusual trading, ensuring that government investments in the capital market are successful and also that the government’s economic and political objectives are met. Moreover, this research is critical for investors and issuers making investment decisions. JEL Classification: G12, G18, G32. © The Author(s) 2024.
SAGE Publications Inc.
21582440
English
Article
All Open Access; Gold Open Access
author Anwar A.; Mohd-Rashid R.; Che-Yahya N.; Bouteraa M.; Chekima B.
spellingShingle Anwar A.; Mohd-Rashid R.; Che-Yahya N.; Bouteraa M.; Chekima B.
Government Ownership, Political Regime, and Flipping of IPOs in Pakistan: Evidence from Emerging Market
author_facet Anwar A.; Mohd-Rashid R.; Che-Yahya N.; Bouteraa M.; Chekima B.
author_sort Anwar A.; Mohd-Rashid R.; Che-Yahya N.; Bouteraa M.; Chekima B.
title Government Ownership, Political Regime, and Flipping of IPOs in Pakistan: Evidence from Emerging Market
title_short Government Ownership, Political Regime, and Flipping of IPOs in Pakistan: Evidence from Emerging Market
title_full Government Ownership, Political Regime, and Flipping of IPOs in Pakistan: Evidence from Emerging Market
title_fullStr Government Ownership, Political Regime, and Flipping of IPOs in Pakistan: Evidence from Emerging Market
title_full_unstemmed Government Ownership, Political Regime, and Flipping of IPOs in Pakistan: Evidence from Emerging Market
title_sort Government Ownership, Political Regime, and Flipping of IPOs in Pakistan: Evidence from Emerging Market
publishDate 2024
container_title SAGE Open
container_volume 14
container_issue 4
doi_str_mv 10.1177/21582440241260962
url https://www.scopus.com/inward/record.uri?eid=2-s2.0-85208783219&doi=10.1177%2f21582440241260962&partnerID=40&md5=8415214958e4e12db052770f206ff802
description This study investigates how government ownership (state-owned IPOs) and the political regime affect the flipping of IPO shares, as well as the moderating impact of investor demand on the association between the political regime and flipping activity. Ordinary least square was employed to investigate the impact of government ownership and political regime on the flipping of IPO shares. The data set consists of 95 IPO firms listed on the Pakistan Stock Exchange (PSX) during the period of January 2000 to December 2019. The findings of this study reveal that government ownership and a political regime have a positive influence on the flipping of IPO shares, demonstrating the quality that creates liquidity in Pakistan’s IPO market. Furthermore, in Pakistan, investor demand has been reported to moderate the association between the political regime and IPO flipping activity. This research offers valuable insights that may result in abnormal trading behavior or flipping immediately after listing. Likewise, state-owned IPOs and the political regime appear to be more appealing to investors, signaling the firms’ high quality, causing in increased demand and higher levels of flipping. As a result, the government and regulators may devise policies to control unusual trading, ensuring that government investments in the capital market are successful and also that the government’s economic and political objectives are met. Moreover, this research is critical for investors and issuers making investment decisions. JEL Classification: G12, G18, G32. © The Author(s) 2024.
publisher SAGE Publications Inc.
issn 21582440
language English
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accesstype All Open Access; Gold Open Access
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