Finance Paper Honored As One Of Year's Best
Finance Paper Honored As One Of Year's Best
UNIVERSITY PARK, PA (June 9, 2005)—A paper analyzing the efficiency of the initial public offering pricing process, which was co-authored by Michelle Lowry of Penn State's Smeal College of Business, recently was honored by the Journal of Financial Economics as one of the publication's best papers of 2004.
"Is the IPO Pricing Process Efficient?" investigates underwriters' treatment of public information throughout the IPO pricing process. In the months prior to the IPO, information is revealed that is relevant to the value of the firm and a portion of this information is publicly available. The paper shows that underwriters fully incorporate all of the public information into the offer price. In contrast, underwriters appear to incorporate most, but not all, public information into the initial filing range that is released several weeks or months prior to the offering. Lowry and her co-author, G. William Schwert of the University of Rochester and the National Bureau of Economic Research, conclude that the IPO pricing process is almost efficient.
The paper, which appeared in the January 2004 issue of the Journal of Financial Economics, earned the second-place Jensen Prize, which honors papers in the areas of corporate finance and organizations. Named for Michal C. Jensen, the founding editor of the journal, the prizes are based on reader votes.
Lowry, who has been an assistant professor of finance at Smeal since 2000, focuses her research in the areas of empirical corporate finance, primarily dealing with the pricing and timing of initial public offerings and the impact of securities litigation on corporate financing decisions. She has a Ph.D. from the University of Rochester and has also worked at the University of Southern California and as an economic consultant.
REPORTERS & EDITORS: For more information, please contact Wyatt DuBois in the Smeal College of Business Media Relations Office at 814-863-3798 or wed112@psu.edu.
Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the Center for Digital Transformation, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.
