Elite law firms in the IPO market
| Autor: | Pablo Moran, J. Ari Pandes |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
040101 forestry
Economics and Econometrics 050208 finance business.industry 05 social sciences 04 agricultural and veterinary sciences Lower incidence Investment banking Issuer Law 0502 economics and business Elite Economics 0401 agriculture forestry and fisheries Statistical dispersion business Initial public offering Finance Underwriting |
| Zdroj: | Journal of Banking & Finance. 107:105612 |
| ISSN: | 0378-4266 |
| DOI: | 10.1016/j.jbankfin.2019.105612 |
| Popis: | IPOs with underwriters that retain an elite law firm exhibit a lower average first-day return. This empirical pattern remains after controlling for an extensive set of proxies associated with existing explanations of IPO initial returns. We rationalize this finding with a pre-IPO pricing model, in which underwriters convey their lack of conflicts of interest to the issuer by engaging an elite law firm. Consistent with this selection channel and our model’s predictions, we find a lower incidence of elite law firm involvement and a larger difference in average first-day return associated with elite law firms during the dot-com period. We document similar findings with respect to the dispersion of IPO first-day returns and a pattern in the issuers’ re-hiring decision of investment banks consistent with our theory. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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