Abstract

This paper investigates the relation between the success of initial public offerings in a given region and the subsequent volume of IPOs in the same region. We find that a high local performance of IPOs is able to trigger a local IPO wave due to private firms' attempt to exploit the favourable local market conditions. Results are robust to the definition of local IPO success, which is addressed using several measures such as the average regional underpricing or the excess demand for newly issued securities. Empirical findings show that the well-documented temporal IPO waves are indeed local IPO waves.