De Economist

, Volume 154, Issue 3, pp 405-427

First online:

25 Years of Dutch Ipos: An Examination of Frequently Cited Ipo Anomalies Within Main Sectors and During Hot- and Cold-Issue Periods

  • R. Q. DoeswijkAffiliated withInstitute for Research and Investment Services (IRIS), research enterprise of Rabobank and Robeco Email author 
  • , H. S. K. HemmesAffiliated withFortis Meespierson
  • , R. H. VenekampAffiliated withRobeco

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This study examines the existence of the initial underpricing and the long-term underperformance anomalies in the Dutch IPO market between 1977 and 2001. We found an average initial underpricing level of 17.6%, measured relative to a sector-specific benchmark. The median initial return was 5.0%, while there were negative initial returns in only 17% of the IPOs. During their first 3 years of listing, IPOs on average underperformed their benchmark by a cumulative 10.0%, but this result is statistically insignificant. The period 1997—beginning of 2000 was a true hot-issue period for growth stocks: their level of initial underpricing was 35.8%, compared to 9.2% during cold-issue periods. These growth IPOs also significantly underperformed their benchmark by 38.4% after 3 years.


Dutch stock market IPO hot- and cold-issue periods initial underpricing long-term underperformance

JEL Code(s)

G12 G14 G24