Evidence on the Strategic Allocation of Initial Public Offerings

Posted: 20 Dec 1998

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 notion 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. Available at SSRN: https://ssrn.com/abstract=5896

Kathleen Weiss Hanley (Contact Author)

Lehigh University - College of Business ( email )

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William J. Wilhelm

University of Virginia - McIntire School of Commerce ( email )

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