Selection Bias and the Underwriter Certification of the Largest Shareholders in Seasoned Equity Offerings
The largest shareholders of issuing firms in Hong Kong are eligible to underwrite rights issues and open offers. We hypothesize that the largest shareholders as underwriters who possess more information are better than investment banks in certifying firm value. Our analyses show that the largest...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
2017
|
| Subjects: | |
| Online Access: | http://eprints.intimal.edu.my/1198/1/2017Lee_PoonJothee-International_Review_of_Finance.SelectionbiasandtheunderwritercertificationofthelargestshareholdersinSeasonedequityofferings.pdf http://eprints.intimal.edu.my/1198/ |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Institution: | INTI International University |
| Language: | English |
| Summary: | The largest shareholders of issuing firms in Hong Kong are eligible to
underwrite rights issues and open offers. We hypothesize that the largest
shareholders as underwriters who possess more information are better than
investment banks in certifying firm value. Our analyses show that the largest
shareholders self-select into their preferred issuing firms, and a selection bias
in the choice of underwriters arises. After controlling for firm and issue
characteristics and addressing the selection bias, our findings support our
hypothesis. We also find that investment banks with greater access to
information through prior underwriting relationship provide better
certification than investment banks without such relationship. |
|---|