The role of IPO underwriting syndicates

This thesis investigate the role underwriting syndicates, which consist of investment banks pooling resources and expertise to take a new firm public. This thesis proposes that the function of the syndicate is to collect information to set initial price more accurately and to provide certification, both of which are important in face of prevalent information assymetries in public offerings. To empirically assess these roles, I use the data of 3,573 U.S. IPOs during the period from January 1997 to December 2014. The results suggest that syndicate members produce information. Additional co-managers in syndicate reduce the underpricing. Furthermore, IPOs with underwriters of high-reputation experience lower underpricing.