On investment banker monitoring in the new issues market

被引:48
|
作者
Jain, BA
Kini, O [1 ]
机构
[1] Georgia State Univ, Coll Business Adm, Dept Finance, Atlanta, GA 30303 USA
[2] Towson State Univ, Coll Business & Econ, Dept Finance, Towson, MD 21204 USA
关键词
investment banker; analysts following; monitoring; underwriter spread; operating and investment performance;
D O I
10.1016/S0378-4266(98)00077-6
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
This article primarily addresses two largely unanswered questions in the financial economics literature: (i) is there a demand for lead bank monitoring in the initial public offering (IPO) market?, and (ii) does monitoring by the lead investment banker lead to better post-issue performance? We find evidence consistent with the demand for underwriter monitoring in the IPO market. We examine variables which proxy for the incentives of lead underwriters to supply monitoring post-issue. These variables include lead investment bank reputation and whether warrants are issued to the underwriter by the issuing firm. We find that lead bank reputation is positively associated with the post-issue performance of LPO firms. We also examine whether additional value added monitoring is provided by unaffiliated analysts. The number of unaffiliated analysts following is positively correlated with post-issue performance. Our results are consistent with third party monitoring in the new issues market. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification. G24; G32; G14; G31.
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页码:49 / 84
页数:36
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