Banking Relationships and first-day IPO Performance - Evidence from ex-ante pricing of Swedish firms
Sammanfattning: The purpose of this thesis is to investigate how pre-Initial Public Offering (IPO) banking relationships affect the level of underpricing for Swedish firms. By studying a sample of 273 IPOs between 2014 and 2018, no support for a signaling effect that reduces information uncertainty for investors can be concluded since firms with a pre-IPO lending relationship do not experience a lower level of underpricing. By further investigating the type of bank the relationship refers to, the sample is narrowed to 122 IPOs, and empirical evidence is found that a previous relationship with a bank that could be employed as the firm's underwriter is associated with a significantly higher level of underpricing. Finally, we find no evidence that employing the existing relationship bank as the underwriter is related to a conflict of interest. The results thus indicate that having a relationship bank with a business scope that goes beyond lending is associated with a significant cost for the issuing firm in terms of money left on the table within the studied sample, regardless of whether the relationship bank underwrites the issue or not.
HÄR KAN DU HÄMTA UPPSATSEN I FULLTEXT. (följ länken till nästa sida)