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Are there long-run implications of analyst coverage for IPOs?

  • Bradley, Daniel
  • Chan, Konan
  • Kim, Joonghyuk
  • Singh, Ajai
Registered author(s):

    Analyst coverage has been cited increasingly as an important attribute in the selection of an underwriter for a firm about to go public. However, it has also been alleged that affiliated analysts provide biased research. In this study, we examine these interrelated issues by examining the long-run performance of IPOs with coverage from their managing underwriters in a 1993-2003 sample. We find that (1) analysts' research coverage from their managing syndicate is not related to long-run performance; (2) long-run performance is not different for firms that receive all-star analyst coverage; and (3) investors are not systematically worse off for following lead underwriter recommendations.

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    File URL: http://www.sciencedirect.com/science/article/B6VCY-4PT0Y4Y-5/1/dd77a63fa445f7f7246291caf3875553
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    Article provided by Elsevier in its journal Journal of Banking & Finance.

    Volume (Year): 32 (2008)
    Issue (Month): 6 (June)
    Pages: 1120-1132

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    Handle: RePEc:eee:jbfina:v:32:y:2008:i:6:p:1120-1132
    Contact details of provider: Web page: http://www.elsevier.com/locate/jbf

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