Data from New York University Provide New Insights into Real Estate
Investment Weekly News
© Copyright 2011 Investment Weekly News via VerticalNews.com
"We examine the role that analysts play in a firm's choice of underwriter using a sample of major United States. investment banks. In order to best capture the competitive environment, which is critical to the potential role that analysts play, we limit our sample of firms to 161 real estate investment trusts (REITs) issuing debt or equity between 1996 and 2004," scientists in New York City, United States report.
"Using the estimation technique of Ljungqvist et al. (Journal of Finance 61:301-340 2006), which accounts for the endogeneity of analyst behavior and the coverage self-selection decision, we find that target prices that are optimistic relative to competitors' target prices, significantly increase an underwriter's probability of attracting underwriting business. This result holds for both equity and debt issues with fees greater than one million dollars," wrote W.I. Boudry and colleagues, New York University.
The researchers concluded: "We also find evidence consistent with the notion that increased regulatory scrutiny of conflicts of interest between analysts and investment banks has decreased the impact of analyst behavior on underwriter choice."
Boudry and colleagues published their study in the Journal of Real Estate Finance and Economics (Analyst Behavior and Underwriter Choice. Journal of Real Estate Finance and Economics, 2011;43(1-2):5-38).
For additional information, contact W.I. Boudry, New York University, Leonard N Stern School Business, 44 W 4TH St., Suite 9-190, New York City, NY 10013, United States.
The publisher's contact information for the Journal of Real Estate Finance and Economics is: Springer, Van Godewijckstraat 30, 3311 Gz Dordrecht, Netherlands.
This article was prepared by Investment Weekly News editors from staff and other reports. Copyright 2011, Investment Weekly News via VerticalNews.com.