There has been evidence in the literature of the IPOs underpricing. This paper studies the relationship between underwriter’s reputation and the degree of underpricing in the secondary market. Study analyzes underpricing in the U.S. stock exchange markets (the NYSE and Nasdaq) in 2017. Cross-sectional OLS regression is used to test the hypothesis of the negative relationship between underwriters’ reputation and the underpricing in the secondary market. The results do not suggest the significant relationship between two factors, however, show that the percentage of insider shares held by the issuing company have a negative relationship with the underpricing and that the NYSE is associated with the lower degree of underpricing.
Sulnis, Vilius, "Does a Choice of the Investment Bank Matter in the IPO Process?" (2018). Senior Independent Study Theses. Paper 7964.
Finance and Financial Management
IPO, Underpricing, Reputation
Bachelor of Arts
Senior Independent Study Thesis
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