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Family Control, Underwriter Prestige, and IPO Underpricing: A Cross Country Analysis

(Kuntara Pukthuanthong‐Le, Department of Finance, College of Business Administration, San Diego State University)
Thomas Walker (Department of Finance, John Molson School of Business, Concordia University)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 17 June 2008



We study the relationship between underwriter prestige, family control, and IPO underpricing in an international setting. Data are collected for 5,789 firms that went public across twenty‐five countries between 1995 and 2002. We find that non‐penny‐stock and non‐U.S. IPOs from countries where firms are predominately family‐controlled benefit from associations with well‐known investment bankers; i.e., these firms are less underpriced than similar firms from countries with a low level of family control. At the same time, our findings support prior evidence that suggests that underwriter prestige is positively related to underpricing in the U.S. IPO market. Family‐controlled firms should consider the findings of this study, which identifies factors that are associated with more successful IPO outcomes.



Walker, T. (2008), "Family Control, Underwriter Prestige, and IPO Underpricing: A Cross Country Analysis", Multinational Business Review, Vol. 16 No. 2, pp. 1-42.



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Copyright © 2008, Emerald Group Publishing Limited

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