IPO underwriters have an incentive to underprice IPOs when they allocate IPO shares to their affiliated funds. Using a novel hand-collected dataset, we find that such nepotism incentives affect IPO pricing. In a regression discontinuity design (RDD) we find that a one percentage point increase in affiliated allocations increases underpricing by 5.4 percentage points.
Our evidence suggests that nepotism has real consequences for IPO issuers. We also revisit a milder version of nepotism analyzed in prior studies and find much stronger support for it than prior work.
For decades and decades, Delaware has been the undisputed leader in the market for corporate law. And yet, it is now clear that Delaware’s superiority...
We analyze the impact of a large shareholder disclosing its voting decisions prior to shareholder meetings on final vote outcomes for management and...