Cross-country IPOs: What explains differences in underpricing?

► We study the impacts of country-level factors on IPO underpricing in 36 countries around the globe. ► We find a positive and significant effect of country-level information asymmetry on IPO underpricing. ► We find that lower cost to entice the block holders reduces IPO underpricing. ► We find that effective contract enforcement mechanisms help to reduce IPO underpricing. ► Finally, we find a positive relation between the accessibility of legal recourse and IPO underpricing.