Societal secrecy and IPO underpricing

Yangyang Chen, Andy C.W. Chui*, Abhinav Goyal, Madhu Veeraraghavan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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We examine how societal secrecy affects the underpricing of initial public offerings (IPOs). Using a large sample of 18,304 IPOs across 38 countries, we find robust evidence that IPO underpricing is positively related to societal secrecy. Additional analyses reveal that investor protection, market openness, and third-party certification moderate the effect of societal secrecy on IPO underpricing. We find that societal secrecy influences IPO underpricing through the information asymmetry, demand for control, and information cascade channels. Collectively, we show that societal secrecy exerts a strong influence on IPO underpricing globally.

Original languageEnglish
Article number102257
Number of pages21
JournalJournal of Corporate Finance
Early online date31 Jul 2022
Publication statusPublished - Oct 2022

Bibliographical note

Funding Information:
We are grateful to an anonymous reviewer, Chuck Kwok, and Xuan Tian (the Editor) for helpful comments and suggestions. We thank Meghana Mohan for excellent research assistance. Veeraraghavan thanks the T A Pai Chair Professorship for funding support. Of course, we remain responsible for any remaining errors.

Publisher Copyright:
© 2022 Elsevier B.V.


  • Cross-border investments
  • Culture
  • Initial public offerings
  • Societal secrecy

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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