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Underwriter deal pipeline and the pricing of IPOs

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  • Boeh, Kevin K.
  • Dunbar, Craig

Abstract

This study examines how initial public offering (IPO) pricing is affected by the pipeline of deals in registration, measured at the underwriter level. Examining IPOs from 2002 to 2013, we find evidence that measures of the IPO bookrunner's pipeline significantly affect pricing decisions. The evidence is mostly consistent with market power and agency theories, which argue that underwriters use a young or growing pipeline to push for higher IPO first day returns.

Suggested Citation

  • Boeh, Kevin K. & Dunbar, Craig, 2016. "Underwriter deal pipeline and the pricing of IPOs," Journal of Financial Economics, Elsevier, vol. 120(2), pages 383-399.
    • Handle: RePEc:eee:jfinec:v:120:y:2016:i:2:p:383-399
    DOI: 10.1016/j.jfineco.2015.08.018
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    Cited by:

    1. Marcato, Gianluca & Milcheva, Stanimira & Zheng, Chen, 2018. "Market integration, country institutions and IPO underpricing," Journal of Corporate Finance, Elsevier, vol. 53(C), pages 87-105.
    2. Daniel Garrett & Ivan T. Ivanov, 2023. "Gas Guns and Governments: Financial Costs of Anti-ESG Policies," Working Paper Series WP 2023-07, Federal Reserve Bank of Chicago.
    3. Chourou, Lamia & Saadi, Samir & Zhu, Hui, 2018. "How does national culture influence IPO underpricing?," Pacific-Basin Finance Journal, Elsevier, vol. 51(C), pages 318-341.
    4. Natalia Matanova & Tanja Steigner & Bingsheng Yi & Qiancheng Zheng, 2019. "Going concern opinions and IPO pricing accuracy," Review of Quantitative Finance and Accounting, Springer, vol. 53(1), pages 195-238, July.
    5. Moran, Pablo & Pandes, J. Ari, 2019. "Elite law firms in the IPO market," Journal of Banking & Finance, Elsevier, vol. 107(C), pages 1-1.
    6. Gao, Shenghao & Brockman, Paul & Meng, Qingbin & Yan, Xuemin, 2020. "Differences of opinion, institutional bids, and IPO underpricing," Journal of Corporate Finance, Elsevier, vol. 60(C).
    7. Śliwiński Paweł & Ablewski Szymon & Gemra Kamil & Łukowski Michał, 2022. "Where is the missing value? Evidence from the game industry IPOs underpricing in Poland," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 58(4), pages 335-350, December.
    8. Chen, Shirley (Shuo) & Meng, Chong, 2024. "Conscientiousness and IPO first-day underpricing," Finance Research Letters, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Initial public offerings; First pricing; Underwriters; Syndicates; IPO markets; Underpricing;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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