The Effect of Banking Relationships on The Firm's IPO Underpricing  

Oleh:

Schenone, Carola

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 59 no. 6 (Dec. 2004), page 2903-2958.
Topik: FIRMS; studies; initial public offerings; investment bankers; professional relationships; correlation analysis
Fulltext: p 2903.pdf (267.99KB)

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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

This paper investigates the effects of pre - IPO banking relationships on a firm's IPO. Using a new and unique data set, which compares the firm's pre - IPO banking relationships to the underwriters managing the firm's new issue, I test whether banking relationships established before the firm's IPO ameliorate asymmetric information problems behind high IPO underpricing. The results show that firms with a pre - IPO banking relationship with a prospective underwriter face about 17% lower underpricing than firms without such banking relationships. These results are robust to controlling for the firm's endogenous selection of the pre - IPO banking institution.

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