Do the Use of Proceeds Disclosure and Bank Characteristics Affect Bank Underwriters’ Certification Roles?

Journal of Business Finance & Accounting, Forthcoming

50 Pages Posted: 4 Jun 2012

See all articles by Katsushi Suzuki

Katsushi Suzuki

Hitotsubashi University - Graduate School of International Corporate Strategy

Kazuo Yamada

Ritsumeikan University - College of Business Administration

Multiple version iconThere are 2 versions of this paper

Date Written: May 29, 2012

Abstract

This paper examines the relationship between the intended use-of-proceeds and the bank characteristics and the bank underwriters’ certification effect in Japan. We find that the bank underwriters are positively associated with the announcement return and the post-issue performance. However, if an issuer discloses that the intended use-of-proceeds is the repayment of loans, the bank underwriters are no longer associated with the announcement return and the post-issue performance. We also find that the banks’ equity holdings are negatively associated with the announcement return. We conclude that the bank certification effect differs depending on the disclosed intended use-of-proceeds and the bank characteristics.

Keywords: Disclosure, Intended Use of Proceeds, Commercial Bank, Certification, Conflicts of Interest, Seasoned Equity Offerings, Underwriter

JEL Classification: G21, G24, M49

Suggested Citation

Suzuki, Katsushi and Yamada, Kazuo, Do the Use of Proceeds Disclosure and Bank Characteristics Affect Bank Underwriters’ Certification Roles? (May 29, 2012). Journal of Business Finance & Accounting, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2075481 or http://dx.doi.org/10.2139/ssrn.2075481

Katsushi Suzuki (Contact Author)

Hitotsubashi University - Graduate School of International Corporate Strategy ( email )

2-1-2 Hitotsubashi
Chiyoda-ku,
Tokyo, 101-8439
Japan

Kazuo Yamada

Ritsumeikan University - College of Business Administration ( email )

2-150 Iwakura
Ibaraki, Osaka 5678570
Japan

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