부산대학교 도서관

We examine the way investment banks allocate IPOs to their affiliated mutual funds worldwide. We analyze IPO allocations to affiliates globally and find significant cross-country differences in the first-day returns of these IPOs. IPOs allocated to mutual funds affiliated with the underwriter have significantly lower first-day returns in Europe, and significantly higher first-day returns in Asia-Pacific, but only if the underwriter for an IPO is not from the same geographic region as the issuer. Overall, the evidence suggests the presence of an economically significant conflict of interest within financial conglomerates for which prior literature has not found robust empirical support. [ABSTRACT FROM AUTHOR]