Why do firms pay high underwriting fees? SEO withdrawal, underwriter certification and CEO turnover

Nancy D. Ursel and Ligang Zhong

Journal of International Financial Markets, Institutions and Money, 2018, vol. 54, issue C, 98-113

Abstract: CEO turnover increases when announced stock issues are withdrawn, even after controlling for endogeneity and firm performance. However, greater underwriter certification of a stock issue is associated with lower CEO turnover. Together, these two findings suggest that the corporate governance practice of terminating CEOs for unsuccessful offerings and the resulting managerial career concerns may help explain the puzzle that managers of issuing firms show little concern for the level of underwriting fees charged: CEOs may use underwriters to help protect their CEO positions.

Keywords: CEO turnover; Withdrawn stock issues; Underwriting fee; Investment banking; Survival analysis (search for similar items in EconPapers)
JEL-codes: G24 G32 G34 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:54:y:2018:i:c:p:98-113

DOI: 10.1016/j.intfin.2017.05.009

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