 Banks, IPO underwriting, and allocation in JapanTakato Hiraki, Toshiki Honda, Akitoshi Ito and Ming Liu Journal of Economics and Business, 2021, vol. 116, issue C, No S0148619521000230 Abstract: We investigate how universal banking groups utilized information advantage at the initial public offerings (IPOs) in Japan over the period 2002-2012. We focus on the IPO issues of universal bank clients allocated by underwriters from the issuers’ main bank groups, competing commercial bank groups, and traditional investment bank groups. We find that the main bank underwriters do not advantage their affiliated mutual funds in terms of the initial and aftermarket returns; neither do the traditional investment bank underwriters. We interpret the former finding as indicating that the information advantage generated by universal banking had not been utilized to increase the benefits of their investment customers. On the other hand, the less informed and thus less monitored commercial bank underwriters allocate IPO issues with low risk-adjusted aftermarket returns to their affiliated mutual funds, suggesting conflicts of interest or an inefficient outcome. Keywords: Japanese IPOs; Underwriting; Universal banking; Mutual funds (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:116:y:2021:i:c:s0148619521000230 DOI: 10.1016/j.jeconbus.2021.106005 Access Statistics for this article Journal of Economics and Business is currently edited by Emanuele Bajo and Moritz Ritter More articles in Journal of Economics and Business from Elsevier |
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