Underwriter Reputation, Issuer-Underwriter Matching, and SEO Performance

Journal of Financial and Quantitative Analysis

68 Pages Posted: 17 Aug 2019 Last revised: 8 Mar 2021

See all articles by Charles W. Calomiris

Charles W. Calomiris

Columbia University - Columbia Business School; National Bureau of Economic Research (NBER)

Yehuda (Yud) Izhakian

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance

Jaime F. Zender

University of Colorado at Boulder - Department of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: August 13, 2019

Abstract

The role of underwriters is altered in new seasoned equity offering deal types in which the offering follows quickly after its announcement. Controlling for the endogenous matching between issuing firms and underwriters, we find increased underwriter reputation mitigates the immediate price impact of announcing an accelerated bookbuilt offering, exacerbates the price impact of announcing a bought offering, and has no immediate price impact for fully marketed deals. Underwriter reputation positively affects price outcomes for fully marketed deals around the offer date. Matching with a more reputable underwriter to achieve improved pricing generates higher total fees but a lower fee-to-proceeds ratio. Reputation effects are not apparent in the absence of controlling for the endogenous matching.

Keywords: Season equity offer, Asymmetric information, One to many matching, Underwriter reputation, Control function approach

JEL Classification: D82, G32, G14

Suggested Citation

Calomiris, Charles W. and Izhakian, Yehuda (Yud) and Zender, Jaime F., Underwriter Reputation, Issuer-Underwriter Matching, and SEO Performance (August 13, 2019). Journal of Financial and Quantitative Analysis, Available at SSRN: https://ssrn.com/abstract=3437007 or http://dx.doi.org/10.2139/ssrn.3437007

Charles W. Calomiris

Columbia University - Columbia Business School ( email )

3022 Broadway
601 Uris, Dept. of Finance & Economics
New York, NY 10027
United States
212-854-8748 (Phone)
212-316-9219 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yehuda (Yud) Izhakian (Contact Author)

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance ( email )

17 Lexington Avenue
New York, NY 10010
United States

HOME PAGE: http://people.stern.nyu.edu/yizhakia/

Jaime F. Zender

University of Colorado at Boulder - Department of Finance ( email )

Boulder, CO 80309
United States
303-554-1665 (Phone)
303-492-4689 (Fax)

HOME PAGE: http://www-bus.colorado.edu/faculty/Zender/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
90
Abstract Views
623
rank
346,790
PlumX Metrics