Wanna Dance ? How Firms And Underwriters Choose Each Other  

Oleh:

Spindt, Paul A. ; Fernando, Chitru S. ; Gatchev, Vladimir A.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 60 no. 5 (Oct. 2005), page 2437-2470.
Topik: equilibrium; studies; bond issues; investment bankers; selection; equilibrium; economic theory; economic models
Fulltext: p 2437.pdf (175.52KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We develop and test a theory explaining the equilbrium matching of issuers and underwriters. We assume that issuers and underwriters associate by mutual choice and that udnerwriter ability and issuer quality are complementary. Our model implies that matching is positive assortative and that mathces are based on firms' and underwriters' relative characteristics at the time of issuance. The model predicts that the market share of top underwriters and their average issue quality varies inversely with issuance volume. Various cross - sectional patterns in underwriting spreads are consistent with equilibrium matching. We find strong empirical confirmation of our theory.

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