36
H3: Companies
that
are
smaller,
younger
and
operates
in
non-finance
industry,
privately
owned
and
have
high
risk
factors
tends
to choose
book
building
marketing method to reduce information asymmetry.
Companies
with
large
tangible
assets
tend
to have
greater
resources
to
reduce
information
asymmetry.
Larger
firms
are able
to attract
larger
investor
and
extract
information
from
them.
In
the
other
side,
smaller
firms
have
fewer
resources
and
have
higher
uncertainty
in
their
valuation than
larger
firms.
Therefore book
built
IPOs are suitable for smaller firms to reduce information
asymmetry.
H3
.a
:
Smaller
companies
tend
to
choose
book
building
as
their
marketing
method
to reduce information asymmetry.
Established
firm
has
more
reputation
in
the
public’s
eye.
Companies
that
has
operated
for
such
a
long
time
before
going
public,
shows
the
quality
of
the
firm
to
the
general
public.
Also,
a
financial
analyst
is
more
likely
to
analyze
an
established
firm,
which will
reduce
the
information
asymmetry.
A
young
firm
in
the
other
hand,
are
more
likely
to
suffer
a
high
degree
on
informational
asymmetry
(Chemmanur
&
Paeglis, 2004). Therefore book built IPOs are
more suitable to
younger firms to
reduce information
asymmetry.
H3
.b
:
Younger companies
tend
to choose
book
building
as
their
marketing
method
to reduce information asymmetry.
Since
the
Central
Bank
of
Republic
of
Indonesia
and
Ministry
of Finance
heavily
regulates
the finance
industry,
they will most
likely have
less information
asymmetry
than
non-finance
industry.
Therefore
the
book
built
IPOs
are the main
option
for
companies who operated in non-finance
industry
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