The impact of marketing on Initial public Offering(IPOs) | ||||
| المجلة العلمية للدراسات التجارية والبيئية | ||||
| Volume 15, Issue 4, October 2024, Page 2996-3060 PDF (536.38 K) | ||||
| Document Type: المقالة الأصلية | ||||
| DOI: 10.21608/jces.2024.417832 | ||||
 View on SCiNiTO | ||||
| Authors | ||||
| Kareem Yahia Mohamed Khalil* 1; Hassan Mounir El-Sady* 2 | ||||
| 1Faculty of Commerce,Business Administration Department,Cairo University | ||||
| 2Faculty of Commerce,Finance and Investment,Business Administration Department,Cairo University | ||||
| Abstract | ||||
| Derrien [2005. Journal of Finance 60, 487–521] and Ljungqvist et al. [2006. Journal of Business] build upon the work of Miller [1977. Journal of Finance 32, 1151–1168] and claim that issuers and the regular customers of investment bankers benefit from the presence of sentiment investors (noise traders) in the market for an initial public offering (IPO). Thus we argue that investment bankers have an incentive to promote an IPO to induce sentiment investors into the market for it. Consistent with this motivation and these models, we expect that the promotional efforts of investment bankers should influence the compensation of investment bankers, the valuation of an IPO, its initial returns and trading, the wealth gains of insider shareholders, and the likelihood that an issuer switches investment bankers for a subsequent seasoned equity offering. Examining data for a sample of IPOs from 1993 through 2000, we find evidence consistent with these predictions and so with the proposition that an investment banker’s ability to market an IPO to sentiment investors is important. | ||||
| Keywords | ||||
| Initial public offering; Marketing; Underpricing; Investment banking | ||||
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