32
Established
firms
send
a
signal
to
the
public
that
it
is
less
risky
than
the
young
and
new
firms.
According
to Rasheed,
Datta
and
Chinta
(1997),
older firms are most
likely to be assessed
by financial
analyst,
which will reduce the
information asymmetry (Bhabra &
Pettway,
2003). Ritter (1991),
Jegadeesh,
Weinsten,
and Welch
(1993),
Hensler,
Rutherford
and
Springer
(1997)
believe
that
the
duration
of
the
firm
that
has
been
operating
before conducting
an
IPO are
in
better
position
to reduce
the
information
asymmetry
because
they are
able
to
provide
several
years
of
data
of
their
operating
performance
to
potential
investors (Bhabra & Pettway, 2003).
2.1.8.3 Industry of The Firms
Another
characteristics
of
firm
that
the
author
would
address
are
the
industry
where
they have operated.
For this particular
study,
the
author
would
like
to
divide
the
industries
to
two
sectors,
the
finance
and
non-finance
industry.
Finance
industry
is heavily
regulated,
and
when
a
financial
company
has
been
operating
for
quite
some
time,
it
reflects on the quality of the firm’s management
(Chemmanur &
Paeglis,
2004).
High
quality
management
is able
to reduce
information
asymmetry.
The
Central
Bank
of Indonesia
and
Indonesian
Ministry
of
Finance
regulate
the finance
industry;
they have the advantages
in reducing
the
information
asymmetry
due
to
the
rules
and
regulation.
Main
purpose
of
the
Indonesian
Ministry
of
Finance
is to prepare
and
implement
standardization
in accordance
to the laws
and
regulation
(Ministry
of
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