TITLE

Innovation, Differentiation, and the Choice of an Underwriter: Evidence from Equity-Linked Securities

AUTHOR(S)
Schroth, Enrique
PUB. DATE
September 2006
SOURCE
Review of Financial Studies;Fall2006, Vol. 19 Issue 3, p1041
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Investment banks imitate other bank's innovative corporate securities and compete with the innovator to underwrite new issues. This article uses data of all the corporate offerings of equity-linked and derivative securities in the Securities Data Company (SDC) to estimate the issuer's demand of underwriting services provided by investment banks across different varieties of securities. It finds that the demand for the innovator's variety is larger than the imitators'. This demand advantage decreases with time and faster for securities that appear later in a sequence of innovations. Imitation becomes less attractive later in the sequence as information from earlier deals spills over to all banks.
ACCESSION #
22502528

 

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