Bookbuilding and strategic allocation

Francesca Cornelli, David Goldreich

Research output: Contribution to journalArticlepeer-review

190 Scopus citations


In the bookbuilding procedure, an investment banker solicits bids for shares from institutional investors prior to pricing an equity issue. The banker then prices the issue and allocates shares at his discretion to the investors. We examine the books for 39 international equity issues. We find that the investment banker awards more shares to bidders who provide information in their bids. Regular investors receive favorable allocations, especially when the issue is heavily oversubscribed. The investment banker also favors revised bids and domestic investors.

Original languageEnglish (US)
Pages (from-to)2337-2369
Number of pages33
JournalJournal of Finance
Issue number6
StatePublished - Jan 1 2001

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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