Evidence on the Strategic Allocation of Initial Public Offerings

Posted: 29 Feb 2008

See all articles by Kathleen Weiss Hanley

Kathleen Weiss Hanley

Lehigh University - College of Business

William J. Wilhelm

University of Virginia - McIntire School of Commerce

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Abstract

The evidence reported in this paper suggests that institutional investors capture a large fraction of the short-run profits associated with IPOs. The favored status enjoyed by institutional investors in underpriced offerings appears, however, to carry a quid pro quo expectation that they will participate in less-attractive issues as well. This finding conforms with the Benveniste and Spindt (1989) and Benveniste and Wilhelm (1990) prediction that U.S. underwriters behave strategically in the allocation of IPOs.

JEL Classification: G12

Suggested Citation

Hanley, Kathleen Weiss and Wilhelm, William J., Evidence on the Strategic Allocation of Initial Public Offerings. Journal of Financial Economics (JFE), Vol. 37, No. 2, 1995, Available at SSRN: https://ssrn.com/abstract=1092221

Kathleen Weiss Hanley (Contact Author)

Lehigh University - College of Business ( email )

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United States

William J. Wilhelm

University of Virginia - McIntire School of Commerce ( email )

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