Underwriter reputation and aftermarket performance of closed-end funds

Research output: Contribution to journalReview article

3 Scopus citations

Abstract

I find a positive relation between underwriter reputation and the initial and long-run aftermarket performance of closed-end funds. This relation persists even after controlling for fund characteristics, types, and investment strategies. The positive relation between underwriter reputation and initial returns supports the notion that prestigious investment bankers tend to promote a price run-up in the immediate aftermarket to enhance their reputation with the issuers and the investors. The better long-run performance for funds underwritten by prestigious underwriters suggests that prestigious underwriters protect their reputation by underwriting only high-quality issues that will perform well in the long run.

Original languageEnglish (US)
Pages (from-to)539-557
Number of pages19
JournalJournal of Financial Research
Volume27
Issue number4
DOIs
StatePublished - Dec 1 2004
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance

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