The Value of Investment Banking Relationships: Evidence from the Collapse of Lehman Brothers

@article{Fernando2012TheVO,
  title={The Value of Investment Banking Relationships: Evidence from the Collapse of Lehman Brothers},
  author={Chitru S. Fernando and A. May and W. Megginson},
  journal={Journal of Finance},
  year={2012},
  volume={67},
  pages={235-270}
}
We examine the long-standing question of whether firms derive value from investment bank relationships by studying how the Lehman collapse affected industrial firms that received underwriting, advisory, analyst, and market-making services from Lehman. Equity underwriting clients experienced an abnormal return of around -5%, on average, in the seven days surrounding Lehman's bankruptcy, amounting to $23 billion in aggregate risk-adjusted losses. Losses were especially severe for companies that… Expand
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