EconPapers    
Economics at your fingertips  
 

Strategic participation in IPOs by affiliated mutual funds: Thai evidence

Kanis Saengchote and Jananya Sthienchoak

Pacific-Basin Finance Journal, 2020, vol. 63, issue C

Abstract: Underwriters and co-managers play an important role in IPOs, but because they often have affiliated mutual funds, concerns about conflicts of interest can arise. On the one hand, they can use this affiliation for the benefit of their asset management business (the information advantage hypothesis); on the other hand, they can use mutual funds under their control to support their IPO clients (the quid pro quo hypothesis). Using mutual fund holding data between 2005 and 2016 and a sample of Thai IPOs during the same period, we find behavior consistent with the information advantage hypothesis in lead underwriter-affiliated funds, and the quid pro quo hypothesis in both. We also find evidence of strategic placements within fund family in captive (tax-deductible) funds targeted at retail investors, raising the possibility that the quid pro quo behavior may unintentionally be facilitated by public policy to encourage mutual fund investment.

Keywords: Initial public offerings; Mutual funds; Conflicts of interest; Retail investors (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X20302390
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:63:y:2020:i:c:s0927538x20302390

DOI: 10.1016/j.pacfin.2020.101427

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).

 
Page updated 2024-12-28
Handle: RePEc:eee:pacfin:v:63:y:2020:i:c:s0927538x20302390