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Competing for Securities Underwriting Mandates: Banking Relationships and Analyst RecommendationsAlexander LjungqvistNew York University (NYU) - Department of Finance; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Research Institute of Industrial Economics (IFN) Felicia C. MarstonUniversity of Virginia - McIntire School of Commerce William J. WilhelmUniversity of Virginia - McIntire School of Commerce December 2003 NYU Working Paper 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.
Number of Pages in PDF File: 49 Keywords: Analyst behavior, Underwriting, Commercial banks, Glass-Steagall Act working papers seriesDate posted: November 11, 2008Suggested CitationContact Information
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