Selection Bias and the Underwriter Certification of the Largest Shareholders in Seasoned Equity Offerings
The largest shareholders of issuing firms in Hong Kong are eligible to underwrite rights issues and open offers. We hypothesize that the largest shareholders as underwriters who possess more information are better than investment banks in certifying firm value. Our analyses show that the largest...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
2017
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| Online Access: | http://eprints.intimal.edu.my/1198/ http://eprints.intimal.edu.my/1198/1/2017Lee_PoonJothee-International_Review_of_Finance.SelectionbiasandtheunderwritercertificationofthelargestshareholdersinSeasonedequityofferings.pdf |
| _version_ | 1848766671491170304 |
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| author | Lee, Chin Chong Poon, Wai Ching Sinnakkannu, Jothee |
| author_facet | Lee, Chin Chong Poon, Wai Ching Sinnakkannu, Jothee |
| author_sort | Lee, Chin Chong |
| building | INTI Institutional Repository |
| collection | Online Access |
| description | The largest shareholders of issuing firms in Hong Kong are eligible to
underwrite rights issues and open offers. We hypothesize that the largest
shareholders as underwriters who possess more information are better than
investment banks in certifying firm value. Our analyses show that the largest
shareholders self-select into their preferred issuing firms, and a selection bias
in the choice of underwriters arises. After controlling for firm and issue
characteristics and addressing the selection bias, our findings support our
hypothesis. We also find that investment banks with greater access to
information through prior underwriting relationship provide better
certification than investment banks without such relationship. |
| first_indexed | 2025-11-14T11:54:51Z |
| format | Article |
| id | intimal-1198 |
| institution | INTI International University |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T11:54:51Z |
| publishDate | 2017 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | intimal-11982018-10-19T09:23:32Z http://eprints.intimal.edu.my/1198/ Selection Bias and the Underwriter Certification of the Largest Shareholders in Seasoned Equity Offerings Lee, Chin Chong Poon, Wai Ching Sinnakkannu, Jothee HB Economic Theory HG Finance The largest shareholders of issuing firms in Hong Kong are eligible to underwrite rights issues and open offers. We hypothesize that the largest shareholders as underwriters who possess more information are better than investment banks in certifying firm value. Our analyses show that the largest shareholders self-select into their preferred issuing firms, and a selection bias in the choice of underwriters arises. After controlling for firm and issue characteristics and addressing the selection bias, our findings support our hypothesis. We also find that investment banks with greater access to information through prior underwriting relationship provide better certification than investment banks without such relationship. 2017-07-11 Article PeerReviewed text en http://eprints.intimal.edu.my/1198/1/2017Lee_PoonJothee-International_Review_of_Finance.SelectionbiasandtheunderwritercertificationofthelargestshareholdersinSeasonedequityofferings.pdf Lee, Chin Chong and Poon, Wai Ching and Sinnakkannu, Jothee (2017) Selection Bias and the Underwriter Certification of the Largest Shareholders in Seasoned Equity Offerings. International Review Of Finance. pp. 1-36. |
| spellingShingle | HB Economic Theory HG Finance Lee, Chin Chong Poon, Wai Ching Sinnakkannu, Jothee Selection Bias and the Underwriter Certification of the Largest Shareholders in Seasoned Equity Offerings |
| title | Selection Bias and the Underwriter
Certification of the Largest
Shareholders in Seasoned Equity
Offerings |
| title_full | Selection Bias and the Underwriter
Certification of the Largest
Shareholders in Seasoned Equity
Offerings |
| title_fullStr | Selection Bias and the Underwriter
Certification of the Largest
Shareholders in Seasoned Equity
Offerings |
| title_full_unstemmed | Selection Bias and the Underwriter
Certification of the Largest
Shareholders in Seasoned Equity
Offerings |
| title_short | Selection Bias and the Underwriter
Certification of the Largest
Shareholders in Seasoned Equity
Offerings |
| title_sort | selection bias and the underwriter
certification of the largest
shareholders in seasoned equity
offerings |
| topic | HB Economic Theory HG Finance |
| url | http://eprints.intimal.edu.my/1198/ http://eprints.intimal.edu.my/1198/1/2017Lee_PoonJothee-International_Review_of_Finance.SelectionbiasandtheunderwritercertificationofthelargestshareholdersinSeasonedequityofferings.pdf |