Stabsseminar fredag

Institutt for foretaksøkonomi har stabsseminar fredag 7. november ved professor William Wilhelm (University of Virginia og Oxford University). Temaet er Competing for Securities Underwriting Mandates: Banking Relationships and Analyst Recommendations.

05.11.2003 - Knut André Karlstad

Tid: Fredag 7.november klokken 12.15-13.45.
Sted: Karl Borchs auditorium.

Paper er tilgjengelig på http://www.nhh.no/for/seminars/2003-fall/071103.pdf.

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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. 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. We interpret this finding as evidence that credibility is central to resolving information frictions associated with securities offerings. Overly aggressive analyst behavior undermines credibility.