The effect of ‘underwriter–issuer’ personal connections on IPO underpricing
基于1999-2020年美国IPO数据，发现发行人与承销商高管间的个人关系显著降低IPO抑价约13个百分点，且对信息不对称严重的公司影响更强。
Using a large sample of US IPOs between 1999 and 2020, we show that personal connections between directors and top executives of issuers and those of underwriting banks result in significantly lower levels of IPO underpricing. We estimate the average effect to be about 13 percentage points. The results hold with several alternative robustness tests including non-random choice of underwriter, endogenous presence of venture capitalists, additional controls for managerial traits, matching exercises and doubly robust estimations. Our results indicate that the effect of connections is significantly stronger for companies that are more likely to suffer from asymmetric information problems. This corroborates the idea that the lower level of underpricing for connected companies reflects better flow of information with the underwriter.