Underwriter Compensation and Corporate Monitoring

Robert Hansen and Paul Torregrosa

Journal of Finance, 1992, vol. 47, issue 4, 1537-55

Abstract: Studies suggest that underwriting syndicates provide marketing services and certify the fairness of offer prices. The authors argue that syndicate lead banks also monitor manager effort, increasing the value of capital-raising companies. A given level of monitoring is associated with a given level of intrinsic value, so there is a "schedule" of certifiable offer prices, depending on the level of monitoring. Monitoring, marketing, and certification are, therefore, all legitimate syndicate functions. New evidence supporting the conclusion that syndicates provide corporate monitoring is presented. Copyright 1992 by American Finance Association.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (76)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-1082%2819920 ... O%3B2-H&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:bla:jfinan:v:47:y:1992:i:4:p:1537-55

Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp

Access Statistics for this article

More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().