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Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/27040

Title: Competing for Securities Underwriting Mandates: Banking Relationships and Analyst Recommendations
Authors: Ljungqvist, Alexander
Marston, Felicia
Wilhelm, William J. Jr.
Keywords: Analyst behavior
Commercial banks
Glass-Steagall Act
Issue Date: 8-Dec-2003
Series/Report no.: S-FI-03-15
Abstract: We investigate directly whether analyst behavior influenced the likelihood of banks winning underwriting mandates for a sample of 16,625 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, prior lending relationships, and the endogeneity of analyst behavior and the bank’s decision to provide analyst coverage. We find no evidence that aggressive analyst recommendations or recommendation upgrades increased their bank’s probability of winning an underwriting mandate after controlling for analysts’ career concerns and bank reputation. Our findings might be interpreted as suggesting that bank and analyst credibility are central to resolving information frictions associated with securities offerings.
URI: http://hdl.handle.net/2451/27040
Appears in Collections:Financial Institutions

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