ePrints

Political money contributions of U.S. IPOs

Lookup NU author(s): Professor Dimitrios Gounopoulos

Downloads

• Accepted version [.pdf]

Licence

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND).

Abstract

We produce the first study to explore the effect of political money contributions on IPOs. Exploiting a hand-collected database, we show that both lobbying and PAC expenditure pay off on issue day as donors incur less underpricing, an effect that can be amplified by contribution size and strategic targeting of recipients. Investigating the causes in multiple channels, we also associate donor IPOs with negative offer price revisions and lower aftermarket volatility. Collectively, our results offer new empirical grounding to the information asymmetry theory.

Publication metadata

Author(s): Gounopoulos D, Kallias A, Kallias K, Tzeremes PG

Publication type: Article

Publication status: Published

Journal: Journal of Corporate Finance

Year: 2017

Volume: 43

Pages: 19-38

Print publication date: 01/04/2017

Online publication date: 22/12/2016

Acceptance date: 20/12/2016

Date deposited: 15/12/2017

ISSN (print): 0929-1199

ISSN (electronic): 1872-6313

Publisher: Elsevier

URL: https://doi.org/10.1016/j.jcorpfin.2016.12.011

DOI: 10.1016/j.jcorpfin.2016.12.011

Altmetrics

Share