Get access

Do the Use of Proceeds Disclosure and Bank Characteristics Affect Bank Underwriters’ Certification Roles?

Authors

  • Katsushi Suzuki,

  • Kazuo Yamada

    Search for more papers by this author
    • The authors are respectively from the Graduate School of Business Administration, Kobe University, Japan; and The College of Business Administration, Ritsumeikan University, Japan. They thank Martin Walker (editor), an anonymous referee, Hideki Hanaeda, Masaru Konishi, Nobuyuki Teshima, Takashi Kaneko, Yukihiro Yasuda, and seminar participants at Hitotsubashi University, Keio University, Kobe University, the Institute of Statistical Research and the Japan Finance Association Conference for helpful discussions and suggestions. Suzuki is grateful for financial support from the KAKENHI projects (No. 23730350) and Shyougaku Syouken Zaidan.


Katsushi Suzuki, Graduate School of Business Administration, Kobe University, Japan. e-mail: suzukatsu@b.kobe-u.ac.jp

Abstract

Abstract:  This paper examines the relationship between the intended use-of-proceeds and the bank characteristics and the bank underwriters’ certification effect in Japan. We find that the bank underwriters are positively associated with the announcement return and the post-issue performance. However, if an issuer discloses that the intended use-of-proceeds is the repayment of loans, the bank underwriters are no longer associated with the announcement return and the post-issue performance. We also find that the banks’ equity holdings are negatively associated with the announcement return. We conclude that the bank certification effect differs depending on the disclosed intended use-of-proceeds and the bank characteristics.

Ancillary