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Competing for Securities Underwriting Mandates: Banking Relationships and Analyst Recommendations


Alexander Ljungqvist


New 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. Marston


University of Virginia - McIntire School of Commerce

William J. Wilhelm


University of Virginia - McIntire School of Commerce

Journal of Finance, Forthcoming

Abstract:     
We investigate whether analyst behavior influenced banks' likelihood of winning underwriting mandates for a sample of 16,625 U.S. debt and equity offerings in 1993 to 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. Although analyst behavior was influenced by economic incentives, we find no evidence that aggressive analyst behavior increased their bank's probability of winning an underwriting mandate. The main determinant of the lead-bank choice is the strength of prior underwriting and lending relationships.

Keywords: Analyst behavior, Underwriting, Commercial banks, Glass-Steagall Act

JEL Classification: G21, G24

Accepted Paper Series


Date posted: January 13, 2005  

Suggested Citation

Ljungqvist, Alexander, Marston, Felicia C. and Wilhelm, William J., Competing for Securities Underwriting Mandates: Banking Relationships and Analyst Recommendations. Journal of Finance, Forthcoming. Available at SSRN: http://ssrn.com/abstract=648246

Contact Information

Alexander Ljungqvist (Contact Author)
New York University (NYU) - Department of Finance ( email )
Stern School of Business
44 West 4th Street, Suite 9-160
New York, NY 10012-1126
United States
212-998-0304 (Phone)
212-995-4220 (Fax)
HOME PAGE: http://pages.stern.nyu.edu/~aljungqv
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Research Institute of Industrial Economics (IFN) ( email )
Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
Felicia C. Marston
University of Virginia (UVA) - McIntire School of Commerce ( email )
P.O. Box 400173
Charlottesville, VA 22904-4173
United States
804-924-1417 (Phone)
William J. Wilhelm
University of Virginia (UVA) - McIntire School of Commerce ( email )
Rouss & Robertson Halls, East Lawn
P.O. Box 400173
Charlottesville, VA 22904-4173
United States
434-924-7666 (Phone)
434-924-7074 (Fax)
HOME PAGE: http://gates.comm.virginia.edu/wjw9a/
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