Business, Management and Accounting
4 years ago

Pre-IPO banking relationships reduce risk and boost performance for Japanese firms.

1 view
RePEc: Research Papers in Economics
The Certification Role of Pre-IPO Banking Relationships: IPO Underpricing and Post-IPO Performance in Japan
Yoshiaki Ogura

Paper Summary

Pre-IPO banking relationships with commercial banks and their venture capital subsidiaries can reduce IPO underpricing in Japan. Lead underwriters and venture backing do not have the same effect. Firms with pre-IPO banking relationships also show lower risk and return after going public. This suggests that these relationships certify the low risk of an IPO firm, rather than addressing concerns about conflicts of interest. This benefit mainly helps individual investors by reducing their risk of overpaying or being misled by the company's signals during the IPO process.

Related papers

Business, Management and Accounting
3 years ago

Institutional investors drive higher IPO underpricing in Chinese market.

Corporate Governance
Venture Capital
Asset Pricing
1 view
Business, Management and Accounting
3 years ago

Customer alliances reduce IPO underpricing and boost post-IPO performance significantly.

Corporate Governance
IT Outsourcing
Knowledge Management
1 view
Business, Management and Accounting
4 years ago

Lead IPO underwriters attract attention, leading to better stock performance.

Corporate Governance
Venture Capital
Asset Pricing
1 view