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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/27015
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| Title: | Competing for Securities Underwriting Mandates: Banking Relationships
and Analyst Recommendations |
| Authors: | Ljungqvist, Alexander
Marston, Felicia
Wilhelm, William J. Jr. |
| Keywords: | Analyst behavior
Underwriting
Commercial banks
Glass-Steagall Act |
| Issue Date: | 14-Jul-2003 |
| Series/Report no.: | S-FI-03-04 |
| Abstract: | We investigate directly whether analyst behavior influenced the
likelihood of banks winning underwriting mandates for a sample of 16,456
U.S. debt and equity offerings sold between December 1993 and June 2002.
We control for the strength of the issuer’s investment-banking
relationships with potential competitors for the mandate and for the
endogeneity of analyst behavior and the bank’s decision to provide
analyst coverage. Contrary to recent allegations, we find no evidence
that aggressive analyst recommendations or recommendation upgrades
increased a bank’s probability of winning an underwriting mandate
once we control for analysts’ career concerns. In fact, the
opposite appears to be the case. Nor do we find that banks competed
successfully for equity deals on the basis of their ability to make
low-cost corporate loans available. Only among debt deals sold since the
deregulation of commercial banks is there evidence of aggressive
recommendations helping banks to win underwriting mandates. |
| URI: | http://hdl.handle.net/2451/27015 |
| Appears in Collections: | Financial Institutions
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