Are there long-run implications of analyst coverage for IPOs?
Analyst coverage has been cited increasingly as an important attribute in the selection of an underwriter for a firm about to go public. However, it has also been alleged that affiliated analysts provide biased research. In this study, we examine these interrelated issues by examining the long-run performance of IPOs with coverage from their managing underwriters in a 1993-2003 sample. We find that (1) analysts' research coverage from their managing syndicate is not related to long-run performance; (2) long-run performance is not different for firms that receive all-star analyst coverage; and (3) investors are not systematically worse off for following lead underwriter recommendations.
Year of publication: |
2008
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Authors: | Bradley, Daniel ; Chan, Konan ; Kim, Joonghyuk ; Singh, Ajai |
Published in: |
Journal of Banking & Finance. - Elsevier, ISSN 0378-4266. - Vol. 32.2008, 6, p. 1120-1132
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Publisher: |
Elsevier |
Saved in:
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