In this study, we argue that media-provided information affects investors' impressions of newly public firms. In 225 initial public offerings (IPOs), the volume of media-provided information had a negative, diminishing relationship with underpricing and a positive, diminishing relationship with stock turnover on the first day of trading. The relationship between the tenor of media-provided information and underpricing increases at a nonlinear rate, and decreases similarly for turnover. Findings provide important evidence that publicly available information not only reflects IPOs' legitimacy, but also adds to their legitimacy and influences investor behavior.
All Science Journal Classification (ASJC) codes
- Business and International Management
- Business, Management and Accounting(all)
- Strategy and Management
- Management of Technology and Innovation