Transparency of Financial Statements on IPO Pricing Around the Adoption of IFRS in an Economy of Little Information Asymmetry

This chapter examines the effect of IPO transparency on IPO price behavior before and after issuance, with little information asymmetry regarding the adoption of IFRS in an economy. The transparency of IPOs increases after adopting IFRS and should be influential for IPO pricing. With a pre-IPO market in Taiwan, the information asymmetry between issuers and investors of IPOs declines. However, we demonstrate that in Taiwan, IPO transparency still raises an IPO's initial price range and its final offer price by raising the initial price range. Transparency does not influence IPO long-run performance. IPO transparency still improves IPO pricing efficiency even in an economy with little information asymmetry due to a pre-IPO market.