The Relationship Between Corporate Governance and Underpricing: A Case Study in Ho Chi Minh Stock Exchange

  • TRAN, Khang Hoang (Department of Finance and Accounting, Faculty of Management and Economics, Tomas Bata University in Zlin) ;
  • NGUYEN, Diep Thi Ngoc (Department of Finance and Accounting, Faculty of Management and Economics, Tomas Bata University in Zlin) ;
  • KNAPKOVA, Adriana (Department of Finance and Accounting, Faculty of Management and Economics, Tomas Bata University in Zlin) ;
  • ALIU, Florin (Department of Finance, University of Business and Technology)
  • Received : 2021.03.30
  • Accepted : 2021.06.17
  • Published : 2021.07.30


Underpricing signifies that IPO share prices do not reflect the fundamental value of the listed company. Corporate governance plays an essential role in IPOs where the board of directors, the independent board of directors, and the board of supervisors are significant elements of accurate share pricing. The study investigates the underpricing phenomena and short-term performance of the IPO companies during the listing process in the Ho Chi Minh Stock Exchange (HOSE). The work outcomes illustrate the role of the corporate organizational structure in the period of the IPO process that may attract potential investors. The hypothesis testing is conducted with a multiple regression model including 100 observations from enterprises doing IPO listed on HOSE. The study results generate signals for the investors and regulators that the board of directors holds a strong negative influence on the underpricing process. Secondly, the level of the independent board of directors and stock exchange in itself has no significant impact on the underpricing process. Underpricing is one of the many anomalies of the stock exchanges that provide wrong signals for the market participants. Identifying stock prices that reflect their intrinsic value is an ongoing debate among scholars, investors, and other market participants.



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