Abstract

http://ssrn.com/abstract=2179491
 
 

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IPO Underwriting Syndicates: Do Social Ties Help Get a Seat at the Table?


John Cooney Jr.


Texas Tech University - Rawls College of Business

Leonardo Madureira


Case Western Reserve University - Weatherhead School of Management

Ajai K. Singh


Lehigh University - College of Business & Economics

Ke Yang


Lehigh University

March 06, 2014


Abstract:     
We examine the role of social ties in IPO underwriting syndicate formation. An investment bank is more likely to be included in the underwriting syndicate — as a book manager, co-manager, or non-managing syndicate member — when it is connected to the IPO firm through interpersonal social ties between the respective executives and directors. Social connections between an investment bank and the IPO’s book manager also increase the likelihood of the bank being chosen as the IPO’s co-manager or non-managing syndicate member. We further show that social ties, as a determinant of the formation of an IPO syndicate, complement other determinants discussed in the literature. In particular, we do not find evidence that social ties foster more cohesiveness in the IPO syndicate. These results are consistent with the role of familiarity in shaping business decisions.

Number of Pages in PDF File: 45

Keywords: G24, G32

JEL Classification: Social Networks, IPOs, Investment Banking, Underwriters

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Date posted: November 23, 2012 ; Last revised: March 8, 2014

Suggested Citation

Cooney, John and Madureira, Leonardo and Singh, Ajai K. and Yang, Ke, IPO Underwriting Syndicates: Do Social Ties Help Get a Seat at the Table? (March 06, 2014). Available at SSRN: http://ssrn.com/abstract=2179491 or http://dx.doi.org/10.2139/ssrn.2179491

Contact Information

John W. Cooney Jr.
Texas Tech University - Rawls College of Business ( email )
Lubbock, TX 79409
United States
806-834-1536 (Phone)
Leonardo Madureira (Contact Author)
Case Western Reserve University - Weatherhead School of Management ( email )
364 PBL Building
Cleveland, OH 44106
United States
216-368-5003 (Phone)
HOME PAGE: http://faculty.weatherhead.case.edu/madureira/
Ajai K. Singh
Lehigh University - College of Business & Economics ( email )
Bethlehem, PA 18015
United States
216-368-0802 (Phone)
216-368-6249 (Fax)
Ke Yang
Lehigh University ( email )
621 Taylor Street
Bethlehem, PA 18015
United States
6107583684 (Phone)
6107586429 (Fax)
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