Journal of Banking & Finance Vol. 37 No. 12 2013
IPO underwriting and subsequent lending
Abstract
This study investigates the relation between IPO underwriting and subsequent lending. We find that when a bank underwrites a firm’s IPO, the bank is more likely to provide the issuer with future loans at a lower cost, compared to banks without an IPO underwriting relationship. The evidence also suggests that the underwriting banks share information surplus with the IPO firms in the post-IPO loans, supporting the cost-saving hypothesis. Overall, the evidence for the relation between prior IPO underwriting and subsequent lending supports the notion that firms can derive value from investment bank relationships.
- DOI
- 10.1016/j.jbankfin.2013.07.041
- Volume
- 37
- Issue
- 12
- Pages
- 5208-5219
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib