A European Empirical Study of Institutional Differences in IPOs Anomalies

Round 1

Reviewer 1 Report

1. It is not clear why a significant empirical contribution to international research results is indicated, as the analysis is limited to 18 European countries.

2. The time series included in the analysis end in 2018, which significantly limits the timeliness of the research results. Events such as the COVID-19 pandemic and Russia's war in Ukraine were not included in the analysis.

3. The literature review does not contain current items. There are single studies from 2015-2018. It is recommended to supplement the literature review with research conducted in this field in the last three years.

4. Table 2 could be successfully replaced with a graph, which would improve the readability of the data.

5. Some mathematical formulas have been pasted as pictures.

6. It is not clear what the term "Neperian logarithm" means. It can be presumed that the term "Naperian' logarithm" was meant.

7. The article is not carefully prepared in terms of editing. Examples:

- in one paragraph we have different font size, page 4,

- the third table has two headings.

 

Author Response

Dear Reviewer,

Thank you very much for your review report and your considerations, which have been taken into account in this new version. In particular, and in response to the modifications made, we would like to point out the following:

1. The title of the paper has been changed, so it is more clear the real contribution because the analysis is limited to 18 European countries.
2. The time series end in 2018 in order to have years enough to estimate BHR up to 5 years. It is true that the COVID-19 pandemic and Russia's war in Ukraine were not included in the analysis but it is not sure how these events affect these type of issues. In my opinion it is better to avoid for the sake of the results in this research. This is considered and explained now in the introduction of the paper.
3. The literature review has been updated including single studies from 2015 to 2021 at the end of that section.
4. Table 2 has been successfully replaced with a graph (new Graph 1), improving the readability of the data.
5. The mathematical formulas pasted as pictures have been replaced to appropriate formulas.
6. The mistake in "Neperian logarithm" has been corrected and changed to "Naperian' logarithm" was meant.
7. The article is now carefully prepared in terms of editing, after corrections.

- The paragraph in page 4 with different font size is now correct.

- Third table has now only one heading. Now it is second Table because of the new Graph.

We hope that this new version of the paper properly includes all your suggestions and indications. Thank you very much for them.

Author Response File: Author Response.docx

Reviewer 2 Report

A well-structured paper with a good review of the related literature. As a reviewer, I have some doubts about the robustness of the data and estimations. I think the below points should be considered for improvement of the paper:

 

Major

The data used in estimations are not properly described. In particular the main dependent variable IPO. The data used in estimations should be all described.

It is not clear whether the data are time series or not. The equations have some sign of the time, but calculations look like for cross-sectional data which are not time series.

If the data are time series, a pre-estimation test is important, such as unit root, etc.

If the data are not time series, it should be stated the OLS regressions are with fixed effect or random.

In estimations, the countries by development level are controlled, but the sectors are not controlled. Pooling all sectors together may affect the robustness of the results of the estimation.

Post-estimation tests for the robustness of the results after OLS regression are essential.

Minor

Lines 470-472: The sentences do not sound academic. Paraphrasing is required.

It is better to avoid the use of web links in the main text (line 285)

 

Throughout the paper, there are some minor grammatical and style mistakes present (lines 111, 137, 249…)

Author Response

Dear Reviewer,

Thank you very much for your review report and your considerations, which have been taken into account in this new version. In particular, and in response to the modifications made, we would like to point out the following: 

Major

1. We have tried to solved your doubts about the robustness of the data and estimations so the data used in estimations are now properly described. In particular, the main dependent variable IPO is now described in section 4 and in Table 3. All the data used in estimations are all described now in this table and in that section.
2. The data are NOT time series or not. One IPO happens only once. The equations have been changed to adapt to cross-sectional data.
3. Data are not time series, son pre-estimation test such as unit root are not required.
4. Data are not time series. These are OLS regressions.
5. All estimations were controlled previously by sectors, by industry. However, this was not included in previous version for the sake of brevity. We apologise for that. Now this is explained in the results before the tables with the results. The effect of sectors (industry) is not relevant in this research. The post-estimations tests for the robustness of the results have been done and explained in this new version that confirm the robustness of our results.

Minor

6. Lines 470-472 have been changed, so they sound now academic.
7. Now, the use of web links is avoided in text. This is indicated and the end of Tables.
8. The minor grammatical and style mistakes in previous version of the paper (lines 111, 137, 249…) have been corrected so the new version of the paper has a correct presentation.

We hope that this new version of the paper properly includes all your suggestions and indications. Thank you very much for them.

Author Response File: Author Response.docx

Reviewer 3 Report

The authors analised the influence of the institutional background in the performance of the Initial Public Offerings (IPOs), while highliting a signifiant  relation between the one-to-five year year performance of the IPO over the regulation type, the level of  corruption, the governance effectiveness, the perceived freedom and trust and information asymmetry. The authors ran multiple regressions on adjusted and one-to-five year performance of the IPO to reach this conclusions. Here are my main concerns about the design of the paper:

1. Strating from line 153 to line 224, the author presents a comprehensive review of similar studies that reaches similar or different conclusions as the present study. It would be interesting that parts of this section would be moved into the Disscusion section and analised in comparison with the present study. 

2. In section 3.1., the Database is too largely exposed, as Table 1 is informative, it shound not be placed in the article, as lines 247-258 already describe the main findignd from that table. It may be placed in an appendix for example. 

3. Table 2 could easly be replaced by a graphic. 

4. Do the categorisation of the IPOs posses a signifiant influence over the results? If not than the entire subsection in which they are disscused should be erased. 

5. In the data availability statement there should be mentioned the URL's that provide the data, for example for the Global Competitiveness index and so...

6. The methodology and theoretical approach is extensively presented, while the results are concisely exposed in relation to it. I recomand condensing the thoretical approach and the methodology. 

Regarding the experimental design, the author have succeded to expose the relationship between the analized variables in a good manner, by selecting simple methods to validate the hypothesis. 

Author Response

Dear Reviewer,

Thank you very much for your review report and your considerations, which have been taken into account in this new version. In particular, and in response to the modifications made, we would like to point out the following: 

1. The discussion section from line 153 to line 224 has been considered in the explanation of the results, at the end of this section.
2. Table 1 could be in an Appendix. I do agree with that. Unfortunately this is not the criteria and opinion of the 2 other reviewers. I live this final decision to the Editor.
3. Table 2 has been replaced by a graphic following your indications. This is the new Graph 1. Thanks for your comment.
4. The categorisation of the IPOs is the core of this research. In my opinion, this cannot be avoided.
5. In the data availability statement it is metioned now the URL that provides the data, including Global Competitiveness index.
6. The theoretical approach and the methodology has been summarised for the sake of brevity.
7. Thank you very much for your appreciation about the paper (the relationship between the analized variables in a good manner, by selecting simple methods to validate the hypothesis).

We hope that this new version of the paper properly includes all your suggestions and indications. Thank you very much for them.

Author Response File: Author Response.docx

Round 2

Reviewer 1 Report

Thank you for making the corrections. I accept the article in its current form.

Reviewer 2 Report

The revised version is enough improved and acceptable.