What Is Special about the Roles of Underwriter Reputation and Market Activities in Initial Public Offerings?

This article examines the interaction between underwriter reputation and market activities during the initial public offering (IPO) process. Underwriter reputation is a significant determinant of premarket underwriter activities, weakly related to aftermarket price stabilization activities, and unre...

Full description

Saved in:
Bibliographic Details
Published in:The Journal of business (Chicago, Ill.) Ill.), 2002-04, Vol.75 (2), p.213-243
Main Authors: Logue, Dennis E., Rogalski, Richard J., Seward, James K., Foster‐Johnson, Lynn
Format: Article
Language:English
Subjects:
Business studies
Economic conditions
Economic models
Excess demand
Initial public offering
Initial public offerings
Insurance underwriting
Investment bankers
Investment banking
Investment banks
Investment horizon
Investment returns
Investors
Market prices
Marketing
Price level changes
Price stabilization
Rates of return
Rationing
Reputations
Revenue
Roles
Stock prices
Studies
Underwriting
Willingness to pay
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This article examines the interaction between underwriter reputation and market activities during the initial public offering (IPO) process. Underwriter reputation is a significant determinant of premarket underwriter activities, weakly related to aftermarket price stabilization activities, and unrelated to issuer returns. Premarket underwriter activities are a significant determinant of issue‐date returns and aftermarket underwriter activities but are unrelated to longer‐run returns. Aftermarket underwriter activities are significantly related to longer‐run returns. The results suggest that simultaneous consideration of underwriter reputation and market activities is important if proper inferences about the IPO process and investor returns are to be drawn.
ISSN:0021-9398
1537-5374
DOI:10.1086/338702