Accéder directement au contenu Accéder directement à la navigation
Pré-publication, Document de travail

The usual suspects: Investment Banks' Recommendations and Emerging Markets

Abstract : The paper addresses two core questions: do recommendations have an impact on the allocation of flows in the asset class? Above all, are we facing in this asset class major problems of asymmetries of information? In order to answer these questions, we used untapped and rich datasets. We constructed a unique database covering the period 1997-2006 for all the bond recommendations by the major Wall Street and City investment banks that dominate the emerging bond markets. The most important and relevant results are as follows. First, 90% of the underwriters recommend, at the announcement date of the issue, to buy or to maintain in their portfolio the bonds issued by the countries where they are acting as lead managers. Second, there is an additional bias, investment banks' recommendations depend also on the relative size of the secondary bond market. In fact, there is a phenomenon that we call "too big to underwrite" meaning that investment banks do not send negative signals to investors of countries that, given their size, are considered important for their business. Finally, by using a simple cross-section analysis, we found that the impact of investment banks' recommendations on capital flows is more significant and more predictable than some macroeconomic variables such as interest rates, economic growth and inflation.
Type de document :
Pré-publication, Document de travail
Liste complète des métadonnées

Littérature citée [38 références]  Voir  Masquer  Télécharger
Contributeur : Spire Sciences Po Institutional Repository <>
Soumis le : jeudi 18 septembre 2014 - 12:37:54
Dernière modification le : mercredi 14 novembre 2018 - 14:08:06
Archivage à long terme le : : vendredi 19 décembre 2014 - 13:11:08


Fichiers produits par l'(les) auteur(s)


  • HAL Id : hal-01065636, version 1
  • SCIENCESPO : 2441/806



Sebastián Nieto Parra, Javier Santiso. The usual suspects: Investment Banks' Recommendations and Emerging Markets. 2006. ⟨hal-01065636⟩



Consultations de la notice


Téléchargements de fichiers