Assortative Matching and Reputation in the Market for First Issues

• 成果类型: Article
• 署名作者: Akkus, Oktay; Cookson, J. Anthony; Hortacsu, Ali
• 署名单位: University of Colorado System; University of Colorado Boulder; University of Chicago
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2020.3594
• 发表日期: 2021
• 页码: 2049-2074
• 关键词: underwriter reputation; Matching models; Selection correction; initial public offering (IPO) underpricing

摘要

Using a tractable structural model of the matching equilibrium between underwriters and equity-issuing firms, we study the determinants of value in underwriter-firm relationships. Our estimates imply that high underwriter prestige is associated with 5.3%-14.1% greater equilibrium surplus. According to the structural model, high prestige exhibits a significant certification effect throughout the sample (1985-2010), but there is also a countervailing effect of underwriter prestige that reflects subscriber preferences for more underpricing. Consistent with trading off profits from issuers and subscribers, high-prestige underwriters underprice more in hotmarkets when rents to catering to subscribers are greatest.