Underwriting fees and shareholder rights

Ji-chai Lin, Bahar Ulupinar

Research output: Journal article publicationJournal articleAcademic researchpeer-review

4 Citations (Scopus)


Do firms' governance provisions affect their terms of obtaining external financing? We hypothesize that it is more difficult for firms with more restrictions on shareholder rights to raise external equity, and that since analyst coverage is an important part of underwriting services, underwriters would use analyst recommendations to promote issuing firms with weaker shareholder rights more strongly and charge them higher underwriting fees. Consistent with our hypothesis, we find that analyst recommendations on issuing firms with weak shareholder rights increase more than those with strong shareholder rights prior to SEOs, and that underwriting spreads are positively related to issuing firms' shareholder rights as proxied by the G-index. Furthermore, the effect of shareholder rights on underwriting fees is largely contained in the six provisions in the E-index.
Original languageEnglish
Pages (from-to)1276-1303
Number of pages28
JournalJournal of Business Finance and Accounting
Issue number9-10
Publication statusPublished - 1 Nov 2013
Externally publishedYes


  • Analyst coverage
  • Gross spreads
  • SEOs
  • Shareholder rights

ASJC Scopus subject areas

  • Accounting
  • Business, Management and Accounting (miscellaneous)
  • Finance


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