Special topics in financial intermediation

The dissertation consists of three research works about special topics of financial intermediation. The main goal of the first study is to determine the effect of some corporate governance-related variables on bank initial public offerings (IPOs). The testable hypotheses involve three dependent variables: abnormal offer price, initial return or underpricing, and long-term performance. The proposed independent variables have no explanatory power on the cross-sectional variation of the abnormal offer price. The proportion of outside directors, the size of the bank, directors and officers' (D&O) equity based compensation plans, and the age of the bank, all have a positive relationship with the level of underpricing. The variables, nominating committee independence, directors' knowledge and experience, and directors' reputation, have the hypothesized positive relationship with the sample's long-run performance. The main goal of the second research work is the analysis of a sample of self-underwritten IPOs. The analysis includes the IPOs' underpricing; long-term performance; lockup and quiet period; risk; volume; and failure and acquisitions. The main result of this study is that here are no significant differences on the level of underpricing between self-underwritten IPOs and conventional IPOs underwritten by independent underwriters. The only significant result about the long-run performance of self-underwritten IPOs is on the subsample of nonpenny stocks, where the larger the firm the lower the long-run performance. The third research work focuses on going private transactions of financial institutions. This study includes the analysis of the cross-sectional differences of the cumulative abnormal returns (CARs) that result from the public announcement of a going private transaction proposal. Similarly, this study tests the long-run performance and the risk change of those firms that stay public after the withdrawal of a going private transaction. The main results suggest that public announcement of a going-private transaction produces positive CARs of about 15 percent. The public announcement of the withdrawal of a going-private transaction generates negative CARs between -4 percent and -5 percent. The total risk of the sample with respect to the matching group experiences a positive and significant increase after the public announcement of a going-private transaction proposal.