Who do you take to tango? examining pairing mechanisms between underwriters and ipo firms in a nascent stock market

Abstract

According to a new study titled "Who do you take to tango? Examining pairing mechanisms between underwriters and initial public offering firms in a nascent stock market," high-reputation underwriters' client-picking behaviors differ in a nascent stock market than in a mature one. Previous research established that in mature markets, high-reputation underwriters are primarily paired with high-quality IPO firms. In a nascent capital market, however, high-reputation underwriters work with IPO firms of varying qualities—good and bad ones, including those who "cooked" their accounting books in order to meet public listing standards.