publication . Article . Preprint . 2003

Evidence Of Information Spillovers In The Production Of Investment Banking Services

Alexander Ljungqvist; Lawrence M. Benveniste; Xiaoyun Yu; William J. Wilhelm;
Open Access
  • Published: 21 Mar 2003 Journal: SSRN Electronic Journal (eissn: 1556-5068, Copyright policy)
  • Publisher: Elsevier BV
Abstract
We present evidence that firms attempting IPOs learn from the experience of their contemporaries. These information spillovers affect revisions in offer terms and the decision whether to carry through with an offering. The evidence also supports the argument that IPOs are implicitly bundled as a means of promoting more equitable sharing of information production costs. One apparent consequence of this behaviour is that while initial returns and IPO volume are positively correlated in the aggregate, the correlation is negative among contemporaneous offerings subject to a common valuation factor. These findings are consistent with the Benveniste, Busaba, and Wilhe...
Subjects
free text keywords: going public decision; information externalities; initial public offerings; investment banking, jel:G24, jel:G32, Initial public offering, Monetary economics, Index fund, Primary market, Equity (finance), Investment banking, business.industry, business, Economics, Finance, Valuation (finance)
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