Underwriter Reputation in Brazilian IPOS
Latin American Business Review (Binghamton, N.Y.), v.12, p.255 - 280, 2011
Posted: 20 Jan 2016
Date Written: December 8, 2011
Abstract
This study updates previous analyses of banks' activities in equity offerings in the Brazilian market. Using data for the 2004–2007 period, the study tests the hypotheses that banks with the highest reputations coordinate offerings with lower initial returns, lower levels of risk and charge more for their services. Three measures of reputation were constructed in line with measures used for the US market. None of the measures showed a statistically significant relationship with returns, risk, or remuneration. The difference between the mid-point of the preliminary price range and the offering price constituted the most significant element in the forecasting of returns.
Keywords: initial public offering, ranking, reputation, underwriter
JEL Classification: G21, G24
Suggested Citation: Suggested Citation