Conflict of Interest in Universal Banking: Evidence from the Post-Issue performance of IPO Firms

Y. Ber, Y. Yafeh and O. Yosha

Working Papers from Tel Aviv

Abstract: Using a unique newly constructed data set on Israeli IPO firms in the 1990s, we study costs and benefits of universal banking. The post-issue accounting profitability of firms underwritten by bank affiliated underwriters that were also borrowers from the same bank in the IPO year, is significantly better than average. This is interpreted as evidence that universal banks use their superior information regarding underwritten firms to float the cherries, not the lemons. We also find, however, that the stock price performance of these firms during the first year following the IPO is lower than average.

Keywords: INVESTMENTS; BANKING (search for similar items in EconPapers)
JEL-codes: G10 G21 G23 G24 G32 (search for similar items in EconPapers)
Pages: 27 pages
Date: 1997
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:fth:teavfo:18-97

Access Statistics for this paper

More papers in Working Papers from Tel Aviv Israel TEL-AVIV UNIVERSITY, THE FOERDER INSTITUTE FOR ECONOMIC RESEARCH, RAMAT AVIV 69 978 TEL AVIV ISRAEL.. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Krichel ().