Political money contributions of U.S. IPOs

Gounopoulos, Dimitirios, Kallias, Antonios ORCID: https://orcid.org/0000-0002-9431-7222, Kallias, Konstantinos ORCID: https://orcid.org/0000-0002-9431-7222 and Tzeremes, Panayiotis G. 2017. Political money contributions of U.S. IPOs. Journal of Corporate Finance 43 , pp. 19-38. 10.1016/j.jcorpfin.2016.12.011

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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.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Additional Information:	Released with a Creative Commons Attribution Non-Commercial No Derivatives License
Publisher:	Elsevier
ISSN:	0929-1199
Date of First Compliant Deposit:	15 January 2020
Date of Acceptance:	20 December 2016
Last Modified:	15 Nov 2023 11:12
URI:	https://orca.cardiff.ac.uk/id/eprint/128580

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