Business School Associate Professor of Finance Jian Yang, Ph.D., CFA has co-authored “The Differential Impact of the Bank-Firm Relationship on IPO Underpricing: Evidence from China.”
The work has been recommended for the best paper award by the ‘Pacific-Basin Finance Journal.’ The designation comes with a $2,000 cash award and an invitation for the authors to participate in the 2013 annual meeting of the Asian Finance Association in Nanchang, China in July to present the paper and receive the award. The study investigates the impact of the bank-firm relationship on IPO (initial public offering) underpricing in China, an emerging economy with a bank-dominated financial system.
The paper finds that both the lender’s and the borrower’s firm characteristics affect the signal quality of the bank-firm relationship, resulting in differential impacts on IPO underpricing. The relationship between firms and banks with high credit quality, or the relationship between firms without political connections and banks has a more positive impact on IPO underpricing.
An earlier version of this paper is posted at Social Science Research Network.