You scratch my back and i scratch yours: evidence from relationship-based bidding in IPO auctions

IF 1.9 Q2 BUSINESS, FINANCE

Review of Quantitative Finance and Accounting Pub Date : 2024-01-30 DOI:10.1007/s11156-024-01245-9

Wenjun Wang

引用次数: 0

Abstract

Using a dataset of institutional bids for IPOs, we study how relationships with lead underwriters impact institutional investors’ bidding strategy in the auctioned IPOs. Our paper finds that strong business ties lead to higher bid prices. The effect is more pronounced among IPO firms that receive less market attention, and is attenuated for IPOs certified by reputable intermediaries. We propose that rent-seeking incentives may be the potential mechanism for this relationship-based bidding. Our study highlights that the business connection between underwriters and institutional investors has effect on the IPO pricing.

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你抓我的后背，我抓你的后背：IPO 拍卖中基于关系的竞价证据

我们利用首次公开募股的机构投标数据集，研究了与主承销商的关系如何影响机构投资者在首次公开募股拍卖中的投标策略。我们的论文发现，紧密的业务联系会导致更高的投标价格。这种影响在市场关注度较低的 IPO 公司中更为明显，而在由声誉良好的中介机构认证的 IPO 公司中则有所减弱。我们认为，寻租动机可能是这种基于关系的投标的潜在机制。我们的研究强调，承销商与机构投资者之间的业务联系对 IPO 定价有影响。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Review of Quantitative Finance and Accounting BUSINESS, FINANCE-

CiteScore

3.20

自引率

17.60%

发文量

期刊介绍： Review of Quantitative Finance and Accounting deals with research involving the interaction of finance with accounting, economics, and quantitative methods, focused on finance and accounting. The papers published present useful theoretical and methodological results with the support of interesting empirical applications. Purely theoretical and methodological research with the potential for important applications is also published. Besides the traditional high-quality theoretical and empirical research in finance, the journal also publishes papers dealing with interdisciplinary topics.