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Potential conflicts of interest arise when IPO underwriters allocate IPO shares to their affiliated funds. We hypothesize that such nepotism incentives affect IPO pricing. Using a novel hand-collected dataset, we find support for this hypothesis in a regression discontinuity design (RDD): a one...
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This paper examines the auditor choices of all the IPOs of German firms between 1990 and 1999. The final sample … consists of 306 firms. In the IPO context, audit quality can be used as a signal about firm value (information signalling). On … risks (insurance signalling). Larger offerings lead to increased liability and reputation risks. Our hypotheses try to …
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