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Both issuing firms and underwriters shall benefit from the associations in underwriting contracts for seasoned equity offerings (SEOs). Issuing firms that are offered underwriting contracts with clustered gross spreads do not have strong incentives to switch away from the firms' prior SEO underwriters, and thus these existing underwriters are able to maintain or gain greater market share. This study investigates how the clustering of percentage gross spreads affects the likelihood of underwriter switching.

Using the investment bank-underwritten SEOs in Hong Kong, the authors find that the percentage gross spreads of 40% of these SEOs are clustered at 2.5%. The seemingly unrelated bivariate probit model, Weibull survival mixed model and trivariate probit model are applied to analyse this phenomenon.

The authors' study provides first direct evidence that the clustering of percentage gross spreads lowers the likelihood of underwriter switching. Investment banks as underwriters can explicitly price underwriting contracts at a clustered level, more likely in periods of greater market volatility, and intentionally retain the banks' client firms using pricing arrangements. The authors' finding and approach offer more direct and distinct support that the issuer–underwriter association can be relationship-based.

Whilst the clustering of fees is interpreted as a type of anticompetitive price sitting, the authors contribute to literature by providing new empirical evidence on why percentage gross spreads as a price dimension are clustered. On top of contract efficiency and collusion, this study's new evidence provides a third view for the clustering of gross spreads.

The purpose of this paper is to examine the section of the Jumpstart Our Business Startups (JOBS) Act related to information dissemination by sell-side security analysts. The paper analyzes how the abolishment of the quiet period requirements for emerging growth companies (EGCs) changes the analyst initiation timing and market expectation of and reaction to the issuance of the analyst recommendations.

This paper considers the effect of the abolishment of the quiet period requirements on analyst coverage initiations for EGCs with IPOs between January 2006 and December 2015 using regression analyses and probability models.

The results confirm the current anecdotal and empirical evidence that a shorter, de facto, quiet period exists. Analyst issue stronger average ratings for EGCs than for similar firms with IPOs before the JOBS Act. EGCs with initiations from multiple analysts also experience stronger positive market reaction than the firms with initial offerings before the JOBS Act. The market seems to anticipate which EGCs will have initiations and particularly which EGCs will have initiations from multiple analysts. The investors, however, do not fully anticipate the strength of actual recommendations.

This paper is important for researchers, practitioners and policy-makers to understand how analysts impact the financial markets, how timing of analyst initiations affects stock prices of EGCs and what firm characteristics play a role in securing analyst coverage shortly after initial offerings.

This paper adds to the emerging literature on consequences of and changes brought by the JOBS Act. Specifically, this paper extends the limited literature on analyst initiations issued for firms with IPOs following the JOBS Act, timing of those initiations and magnitude of the market’s response to the initiations.

The purpose of this paper is to utilize the initial public offerings (IPO) market to research the effect the stock market crash of 1987 had on the market psyche.

The paper compares the number of IPOs, as well as accounting data during the years surrounding the 1987 crash to determine if there is a change in financial quality. The underwriting fee structure, underpricing and short term price changes during one year prior to and one year following the 1987 crash are examined, as well as the long term returns surrounding the crash.

The stock market crash of 1987 did change the market psyche in the short to medium term. Results show greater risk aversion in the post crash period, as evidenced by fewer IPOs from riskier firms. Pricing is found to be more rational – less one day run‐up, less upward adjustment from offering range, and less likely to be overpriced in intermediate and longer terms.

The paper demonstrates the importance of market sentiment and may illuminate the causes of market cycles.

Chen and Ritter (2000) documented that underwriter spreads for recent US initial public offerings (IPOs) in $20 million range as well as much larger IPOs in the $80 million range are clustered at 7%. This observation has led to a Department of Justice (DOJ) enquiry into potential price fixing by underwriters. We demonstrate through a times series analysis that IPOs have tripled in size and become much riskier over time. A pooled data analysis can therefore mask evidence of competition in the market. We find that spread clustering is not a recent phenomenon. Over time, clustering at 7% has increased as clustering above 7% has declined. IPO spreads have declined significantly over time as the firms going public more recently are riskier, underwriting efforts have increased and recent IPOs are much larger than IPOs in the past. Controlling for time trends, larger IPOs have lower average spreads. The market for underwriting IPOs seems to be competitive with entry of new firms during the hot markets.

The purpose of this paper is to empirically examine the relationship between the level of underwriter spread and ownership structure by using data from Japanese IPO firms that are issued during the years 1997‐2002.

The paper uses regression analysis to determine the effect of the ownership structure (board, bank, affiliated venture capital firms) on underwriter spread and on the post‐issue operating performance of IPO firms.

This paper finds several results that are in contrast with previous studies. The ownership by board members is positively associated with the level of gross spread but is not associated with post‐issue operating performance. The presence of a commercial bank in the ownership structure of IPO firms decreases the gross spread and increases the post‐issue operating performance of IPO firms. Issuers pay a lower underwriting fee as the ownership share of the lead underwriter‐affiliated VC increases, unlike that of other VCs.

The results of this paper, supporting certification and monitoring hypotheses, contribute to academic research. Most previous studies do not support certification effects.

We investigate whether external investment banks or internal key IPO insiders such as company directors and officers, venture capitalists and institutions that hold an IPO's stock serve as effective monitors of IPO investments over the post-IPO period. We measure median changes in each group's holdings for the sample, finding large changes in these values during a long-run holding period. We find that long-run buy-and-hold returns (BHARs) are positively related to the lead investment bank underwriter reputation and the gross spread demonstrating that the external monitoring by investment banking firms increases the post-IPO firm's value. Holding the underwriter reputation constant, we find that the BHARs are positively related to the gross spread, also indicative of the value of monitoring by external investment banks.

Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

Although tax relief on pensions is a controversial area of government expenditure, this is the first study of the tax effects for a real-world defined benefit pension scheme. First, we estimate the tax and national insurance contribution (NIC) effects of the scheme's change from final salary to career average revalued earnings (CARE) in 2011 on the gross and net wealth of the sponsor, government, and 16 age cohorts of members, deferred pensioners, and pensioners. Second, we measure the size of the twelve income tax and NIC payments and reliefs for new members and the sponsor, before and after the rule changes. We find the total subsidy split is roughly 40% income tax subsidy and 60% NIC subsidy. If lower tax rates in retirement and the risk premium effect of the exempt-exempt-taxed (EET) system are not viewed as a tax subsidy, the tax subsidy to members largely disappears. Any remaining subsidy drops, as a proportion of pension benefits, for high earners, as does that for NICs.

The purpose of this paper is to investigate whether all of the risk factors were priced during the internet bubble period.

A unique hand collected dataset was used from public prospectuses for companies that issued an initial public offering during the internet bubble period. Three hypotheses were proposed: the risk factors mentioned in the prospectus are important for IPO trading and therefore affect IPO underpricing; risk factors affect the IPO deal attributes; and the number of risk factors cited by the issuing firm is affected by direct participants such as venture capitalists and investment bankers.

It was found that hi‐tech dummy played a significant role during the bubble period. Moreover, not all risk factors are regarded important, some of them are not significant at all as predicted by first hypothesis. The most striking observation is the negative economic significance of the risk factor no prior market for the traded stock. This reveals that, traders are selective in valuing risks and may value some factors as opportunities and not as risk factors. In addition, the results reveal that risk factors do affect the deal attributes as predicted by our second hypothesis. Also, the pricing of these risk factors are not different between retail and hi‐tech companies. Regarding the participants, it was found that venture capitalists and investment bankers have a significant statistical and economic effect on the number of risk factors reported in the prospectus.

The paper contributes to the literature by investigating the IPO underpricing phenomenon in the internet bubble period.

Resource redeployment may occur when a firm exits from one line of business and enters another. We suggest that when multiproduct firms identify opportunities in new high-growth markets, their entry will occur alongside exit from low-growth markets when the firm is resource-constrained. For our sample of over 47,000 high-tech US firms in CorpTech from 1993 to 2004, 5% of the firm-years include simultaneous entry and exit at the product market level, which we term “product turnover.” Firms are more likely to engage in product turnover when there is a larger spread between the highest and lowest growth rates for the product markets in the firm’s portfolio. This effect is strongest for small- and medium-sized firms, which tend to be privately held. Therefore, future research on resource redeployment might find fruitful ground in samples of mid-size firms.