IDEAS home Printed from https://ideas.repec.org/a/oup/rfinst/v22y2009i10p3977-4007.html
   My bibliography  Save this article

Scaling the Hierarchy: How and Why Investment Banks Compete for Syndicate Co-management Appointments

Author

Listed:
  • Alexander Ljungqvist
  • Felicia Marston
  • William J. Wilhelm

Abstract

We show that relatively optimistic research and even the mere provision of research coverage for the issuer (regardless of its direction) attract co-management appointments for securities offerings. Co-management appointments are valuable because they help banks establish relationships with issuers. These relationships, in turn, substantially increase the banks' chances of winning more lucrative lead-management mandates in the future. This is true even in the presence of historically exclusive banking relationships. The Author 2009. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oxfordjournals.org., Oxford University Press.

Suggested Citation

  • Alexander Ljungqvist & Felicia Marston & William J. Wilhelm, 2009. "Scaling the Hierarchy: How and Why Investment Banks Compete for Syndicate Co-management Appointments," Review of Financial Studies, Society for Financial Studies, vol. 22(10), pages 3977-4007, October.
  • Handle: RePEc:oup:rfinst:v:22:y:2009:i:10:p:3977-4007
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/rfs/hhn106
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Richard Lowery & Tim Landvoigt, 2016. "Financial Industry Dynamics," 2016 Meeting Papers 1248, Society for Economic Dynamics.
    2. Lauren Cohen & Andrea Frazzini & Christopher J. Malloy, 2012. "Hiring Cheerleaders: Board Appointments of "Independent" Directors," Management Science, INFORMS, vol. 58(6), pages 1039-1058, June.
    3. Mehran, Hamid & Stulz, Rene M., 2007. "The economics of conflicts of interest in financial institutions," Journal of Financial Economics, Elsevier, vol. 85(2), pages 267-296, August.
    4. Lauren Cohen & Andrea Frazzini & Christopher Malloy, 2010. "Sell-Side School Ties," Journal of Finance, American Finance Association, vol. 65(4), pages 1409-1437, August.
    5. Dong, Gang Nathan, 2016. "Social capital as correlate, antecedent, and consequence of health service demand in China," China Economic Review, Elsevier, vol. 37(C), pages 85-96.
    6. Jeon, Jin Q. & Ligon, James A., 2011. "The role of co-managers in reducing flotation costs: Evidence from seasoned equity offerings," Journal of Banking & Finance, Elsevier, vol. 35(5), pages 1041-1056, May.
    7. Chang, Xin & Shekhar, Chander & Tam, Lewis H.K. & Yao, Jiaquan, 2016. "The information role of advisors in mergers and acquisitions: Evidence from acquirers hiring targets’ ex-advisors," Journal of Banking & Finance, Elsevier, vol. 70(C), pages 247-264.
    8. Andrikopoulos, Andreas & Economou, Labriana, 2016. "Coauthorship and subauthorship patterns in financial economics," International Review of Financial Analysis, Elsevier, vol. 46(C), pages 12-19.
    9. Vithanage, Kulunu & Neupane, Suman & Chung, Richard, 2016. "Multiple lead underwriting syndicate and IPO pricing," International Review of Financial Analysis, Elsevier, vol. 48(C), pages 193-208.
    10. Sette, Enrico, 2011. "Competition and optimistic advice of financial analysts: Evidence from IPOs," Journal of Financial Intermediation, Elsevier, vol. 20(3), pages 441-457, July.
    11. John Asker & Alexander Ljungqvist, 2010. "Competition and the Structure of Vertical Relationships in Capital Markets," Journal of Political Economy, University of Chicago Press, vol. 118(3), pages 599-647, June.
    12. Walter Boudry & Jarl Kallberg & Crocker Liu, 2011. "Analyst Behavior and Underwriter Choice," The Journal of Real Estate Finance and Economics, Springer, vol. 43(1), pages 5-38, July.
    13. Nofsinger, John R. & Wang, Weicheng, 2011. "Determinants of start-up firm external financing worldwide," Journal of Banking & Finance, Elsevier, vol. 35(9), pages 2282-2294, September.
    14. Oesch, David & Schuette, Dustin & Walter, Ingo, 2014. "Real Effects of Investment Banking Relationships: Evidence from the Financial Crisis," Working Papers on Finance 1405, University of St. Gallen, School of Finance, revised Aug 2015.
    15. Erik Devos, 2014. "Are Analysts’ Recommendations for Other Investment Banks Biased?," Financial Management, Financial Management Association International, vol. 43(2), pages 327-353, June.
    16. Shivdasani, Anil & Song, Wei-Ling, 2011. "Breaking down the barriers: Competition, syndicate structure, and underwriting incentives," Journal of Financial Economics, Elsevier, vol. 99(3), pages 581-600, March.
    17. John Asker, 2006. "Sharing Investment Bankers," Working Papers 06-23, New York University, Leonard N. Stern School of Business, Department of Economics.
    18. Jeon, Jin Q. & Lee, Cheolwoo, 2015. "A new measure for heated negotiation in the IPO syndicate," The North American Journal of Economics and Finance, Elsevier, vol. 33(C), pages 278-304.
    19. repec:eee:jfinec:v:124:y:2017:i:3:p:614-631 is not listed on IDEAS
    20. Jeon, Jin Q. & Lee, Cheolwoo & Nasser, Tareque & Via, M. Tony, 2015. "Multiple lead underwriter IPOs and firm visibility," Journal of Corporate Finance, Elsevier, vol. 32(C), pages 128-149.
    21. repec:eee:jaecon:v:65:y:2018:i:2:p:302-330 is not listed on IDEAS
    22. Bradley, Daniel & Clarke, Jonathan & Cooney, John, 2012. "The impact of reputation on analysts’ conflicts of interest: Hot versus cold markets," Journal of Banking & Finance, Elsevier, vol. 36(8), pages 2190-2202.
    23. Bradley, Daniel & Kim, Incheol & Krigman, Laurie, 2015. "Top VC IPO underpricing," Journal of Corporate Finance, Elsevier, vol. 31(C), pages 186-202.
    24. Shivdasani, Anil & Song, Wei-Ling, 2010. "Breaking Down the Barriers: Competition, Syndicate Structure, and Underwriting Incentives," Working Papers 10-25, University of Pennsylvania, Wharton School, Weiss Center.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:rfinst:v:22:y:2009:i:10:p:3977-4007. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/sfsssea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.