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

Daniel Bradley, Konan Chan, Joonghyuk Kim and Ajai Singh

Journal of Banking & Finance, 2008, vol. 32, issue 6, 1120-1132

Abstract: 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.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:32:y:2008:i:6:p:1120-1132

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