The global settlement, all-star analyst departures, and their impact on the capital markets / Xin Wu Mahaney-Walter.

Format:

Book

Manuscript

Thesis/Dissertation

Author/Creator:

Mahaney-Walter, Xin Wu, author.

Contributor:

Taylor, Luke A., degree supervisor, degree committee member.

Gilje, Erik P., degree committee member.

Musto, David K., degree committee member.

University of Pennsylvania. Department of Finance, degree granting institution.

Language:

English

Subjects (All):

Penn dissertations--Finance.

Finance--Penn dissertations.

Local Subjects:

Penn dissertations--Finance.

Finance--Penn dissertations.

Physical Description:

vii, 78 leaves : illustrations ; 29 cm

Production:

[Philadelphia, Pennsylvania] : University of Pennsylvania, 2015.

Summary:

The Global Research Analyst Settlement prohibited twelve large investment banks from tying equity analysts' compensation to investment banking revenues, causing a large number of Institutional Investor "all-star" analysts to exit the sell-side industry. Using a difference-in-differences specification, I find that the departure of all-stars caused their bank-industry underwriting groups to lose equity issuance market share. Market share losses were more severe for IPOs than for IPOs and follow-on underwritings combined. The higher the average quality of all-stars in a bank-industry, the more severe were the bank-industry's losses. Additionally, the departure of all-stars raised the cost of equity capital for IPOs underwritten by their bank-industry groups, particularly for IPOs that were more difficult to value. Ultimately, the loss of sell-side research talent, an unintended consequence of regulation, forced issuers to accept research coverage of inferior quality, raising the cost of obtaining public capital.

Notes:

Ph. D. University of Pennsylvania 2015.

Department: Finance.

Supervisor: Luke Taylor.

Includes bibliographical references.

OCLC:

947137658