Survival Analysis of Initial Public Offerings in Malaysia

  • Fong Peng Lim Department of Mathematics and Statistics, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor
  • Lee Kwee Siang Department of Mathematics and Statistics, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor
  • Wendy Ling Shin Yie Department of Mathematics and Statistics, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor
  • Yap Hong Keat Department of Mathematical and Actuarial Sciences, Lee Kong Chian Faculty of Engineering and Science, Universiti Tunku Abdul Rahman, 43000 Kajang, Selangor
  • Kek Sie Long Department of Mathematics and Statistics, Faculty of Applied Science and Technology, Universiti Tun Hussein Onn Malaysia, 84600, Johor.

Abstract

This study presents a survival analysis on both existing public listed companies in Bursa Malaysia and future initial public offering (IPO) companies in Malaysia. The analyses includes both types of explanatory variable: financial information and non-financial information within the prospectuses of IPOs. Initially, we validate the proportional hazards assumptions through the Schoenfeld residual test and Kaplan-Meier survival curves. It then is followed by the univariate analyses wherein we use Wald test for continuous explanatory variables, and both Chi-square test and Fisher’s exact test for categorical explanatory variables. We then conduct the multivariate analysis by applying the Cox proportional hazards model for investigating the influence of potential factors on the survival of IPOs in the context of Malaysia. The best-fitted Cox proportional hazards model is obtained via stepwise model selection. The results indicate that the ratio of working capital to gross proceeds, ratio of listing expenses to gross proceeds, return on equity, debt ratio and debt to equity ratio are significantly influence the survival of IPOs in Malaysia.

References

Baluja, G. and Singh, B. (2016), The Survival Analysis of Initial Public Offerings in India. Journal of Advances in Management Research, 13(1): 23 – 41.
Chancharat, N., Krishnamurti, C. and Tian, G. (2012), Board Structure and Survival of New Economy IPO Firms. Corporate Governance: An International Review, 20(2): 144 – 163.
Espenlaub, S., Khurshed, A. and Mohamed, A. (2012), IPO Survival in a Reputational Market. Journal of Business Finance & Accounting, 39(3‐4): 427-463
Published
2023-11-19
How to Cite
LIM, Fong Peng et al. Survival Analysis of Initial Public Offerings in Malaysia. Menemui Matematik (Discovering Mathematics), [S.l.], v. 45, n. 2, p. 240-246, nov. 2023. ISSN 0126-9003. Available at: <https://myjms.mohe.gov.my/index.php/dismath/article/view/24686>. Date accessed: 26 july 2024.

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