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Mohit Bhandari - One of the best experts on this subject based on the ideXlab platform.
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potential financial Conflict of Interest among physician editorial board members of orthopaedic surgery journals
Journal of Bone and Joint Surgery American Volume, 2017Co-Authors: Charles T Mehlman, Kanu Okike, Mohit Bhandari, Mininder S KocherAbstract:The practice of medicine is based on evidence from peer-reviewed literature. As can occur with author-related funding, the integrity of the process by which manuscripts are reviewed, edited, and approved for publication may be at risk due to financial Conflict of Interest. The purpose of our study was to assess potential financial Conflict of Interest among physician editorial board members of orthopaedic surgery journals. We identified the physician editorial board members of 15 orthopaedic surgery journals and searched the 2014 payments that were archived in the Centers for Medicare & Medicaid Services Open Payments system (mandated by the Physician Payments Sunshine Act). Total dollar values were calculated and tabulated in a multilevel fashion: nothing reported, >$0 and ≤$10,000, >$10,000, >$250,000, and >$950,000. We identified 908 physician editors of 15 orthopaedic surgery journals. Something of financial value was received by 78% (712 of 908) of these individuals. Rates of editorial board potential financial Conflict of Interest for individual journals ranged from 4% to 73% in the >$10,000 category. At the >$250,000 mark, rates ranged from 0% (2 journals) to 31%. When applying the >$950,000 criterion, physician potential Conflict of Interest ranged from 0% (5 journals) to 13%. Editor-related potential financial Conflicts of Interest exist in the orthopaedic surgery journals that we analyzed. These potential financial Conflicts could possibly impact reviews.
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a systematic review of surgical randomized controlled trials part 2 funding source Conflict of Interest and sample size in plastic surgery
Plastic and Reconstructive Surgery, 2016Co-Authors: Sophocles H Voineskos, Christopher J Coroneos, Natalia Ziolkowski, Manraj Kaur, Laura Banfield, Maureen O Meade, Kevin C Chung, Achilleas Thoma, Mohit BhandariAbstract:BACKGROUND The authors examined industry support, Conflict of Interest, and sample size in plastic surgery randomized controlled trials that compared surgical interventions. They hypothesized that industry-funded trials demonstrate statistically significant outcomes more often, and randomized controlled trials with small sample sizes report statistically significant results more frequently. METHODS An electronic search identified randomized controlled trials published between 2000 and 2013. Independent reviewers assessed manuscripts and performed data extraction. Funding source, Conflict of Interest, primary outcome direction, and sample size were examined. Chi-squared and independent-samples t tests were used in the analysis. RESULTS The search identified 173 randomized controlled trials, of which 100 (58 percent) did not acknowledge funding status. A relationship between funding source and trial outcome direction was not observed. Both funding status and Conflict of Interest reporting improved over time. Only 24 percent (six of 25) of industry-funded randomized controlled trials reported authors to have independent control of data and manuscript contents. The mean number of patients randomized was 73 per trial (median, 43, minimum, 3, maximum, 936). Small trials were not found to be positive more often than large trials (p = 0.87). CONCLUSIONS Randomized controlled trials with small sample size were common; however, this provides great opportunity for the field to engage in further collaboration and produce larger, more definitive trials. Reporting of trial funding and Conflict of Interest is historically poor, but it greatly improved over the study period. Underreporting at author and journal levels remains a limitation when assessing the relationship between funding source and trial outcomes. Improved reporting and manuscript control should be goals that both authors and journals can actively achieve.
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level of evidence and Conflict of Interest disclosure associated with higher citation rates in orthopedics
Journal of Clinical Epidemiology, 2011Co-Authors: Kanu Okike, Mininder S Kocher, Charles T Mehlman, Jennifer L Torpey, Benedict U Nwachukwu, Mohit BhandariAbstract:Abstract Objective To identify the scientific and nonscientific factors associated with rates of citation in the orthopedic literature. Study Design and Setting All original clinical articles published in three general orthopedics journals between July 2002 and December 2003 were reviewed. Information was collected on variables plausibly related to rates of citation, including scientific and nonscientific factors. The number of citations at 5 years was ascertained and linear regression was used to identify factors associated with rates of citation. Results In the multivariate analysis, factors associated with increased rates of citation at 5 years were high level of evidence (22.2 citations for level I or II vs. 10.8 citations for level III or IV; P =0.0001), large sample size (18.8 citations for sample size of 100 or more vs. 7.9 citations for sample size of 25 or fewer; P P =0.023), self-reported Conflict of Interest disclosure involving a nonprofit organization (17.4 citations for nonprofit disclosure vs. 10.6 citations for no disclosure; P =0.027), and self-reported Conflict of Interest disclosure involving a for-profit company (26.1 citations for for-profit disclosure vs. 10.6 citations for no disclosure; P =0.011). Conclusion High level of evidence, large sample size, representation from multiple institutions, and Conflict of Interest disclosure are associated with higher rates of citation in orthopedics.
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accuracy of Conflict of Interest disclosures reported by physicians
The New England Journal of Medicine, 2009Co-Authors: Kanu Okike, Mininder S Kocher, Charles T Mehlman, Erin X Wei, Mohit BhandariAbstract:BACKGROUND The recent public reporting of payments made to physicians by manufacturers of orthopedic devices provides an opportunity to assess the accuracy of physicians' Conflict-of-Interest disclosures. METHODS We analyzed the reports of payments made to physicians by five manufacturers of total hip and knee prostheses in 2007. For each payment recipient who was an author of a presentation or served as a committee member or board member at the 2008 annual meeting of the American Academy of Orthopaedic Surgeons, the disclosure statement was reviewed to determine whether the payment had been disclosed. To ascertain the reasons for nondisclosure, a survey was administered to physicians who had received payments that were not disclosed. RESULTS The overall rate of disclosure was 71.2% (245 of 344 payments). For payments that were directly related to the topic of the presentation at the meeting, the rate was 79.3% (165 of 208); for payments that were indirectly related, the rate was 50.0% (16 of 32); and for payments that were unrelated, the rate was 49.2% (29 of 59) (P=0.008). In the multivariate analysis, payments were also more likely to have been disclosed if they exceeded $10,000 (P<0.001), were directed toward an individual physician rather than a company or organization (P=0.04), or included an in-kind component (P=0.002). Among the 36 physicians who responded to the survey regarding reasons for nondisclosure (response rate, 39.6%), the reasons most commonly given for nondisclosure were that the payment was unrelated to the topic of presentation at the annual meeting (38.9% of respondents) and that the physician had misunderstood the disclosure requirements (13.9%); 11.1% reported that the payment had been disclosed but was mistakenly omitted from the program. CONCLUSIONS In this study of self-reported Conflict-of-Interest disclosure by physicians at a large annual meeting, the rate of disclosure was 79.3% for directly related payments and 50.0% for indirectly related payments.
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Conflict of Interest in orthopaedic research an association between findings and funding in scientific presentations
Journal of Bone and Joint Surgery American Volume, 2007Co-Authors: Kanu Okike, Mininder S Kocher, Charles T Mehlman, Mohit BhandariAbstract:Background: Financial Conflict of Interest has been associated with an increased likelihood that authors will report positive study outcomes. The purpose of this study was to investigate the association between types of declared Conflict of Interest and reported study outcomes in orthopaedic research. Methods: The abstracts of all podium presentations given at the 2001 and 2002 Annual Meetings of the American Academy of Orthopaedic Surgeons were analyzed by three orthopaedic surgeons with advanced training in clinical epidemiology. The findings reported in each abstract were graded as positive, negative, neutral, or not applicable. Self-reported Conflict of Interest was recorded and classified. Results: Conflicts of Interest were reported in 40.8% (212) of 519 abstracts. The interobserver reliability of the grading of the study findings was acceptable (intraclass correlation coefficient, 0.725). Rates of Conflict of Interest related to royalties, stock options, or consultant or employee status varied significantly by subspecialty field (p < 0.001). The overall rate of positive study findings was 84.0% (436 of the 519 abstracts). Positive findings were more common in studies authored by individuals with a Conflict of Interest related to royalties (98.4% [sixty of sixty-one] compared with 88.0% [381 of 433] for studies authored by individuals without a Conflict of Interest related to royalties; relative risk = 1.1 [95% confidence interval = 1.0 to 1.1]; p = 0.02), in studies authored by individuals with a Conflict of Interest related to stock options (100.0% [twenty-nine of twenty-nine] compared with 84.7% [394 of 465]; relative risk = 1.2 [95% confidence interval = 1.0 to 1.3]; p = 0.04), and in studies authored by individuals with a Conflict of Interest related to consultant or employee status (97.8% [ninety-one of ninety-three] compared with 89.0% [357 of 401]; relative risk = 1.1 [95% confidence interval = 1.0 to 1.2]; p = 0.01). Positive findings were not more common in studies authored by individuals with a Conflict of Interest related to research or institutional funding (93.5% [143 of 153] compared with 91.8% [313 of 341]; relative risk = 1.0 [95% confidence interval = 0.95 to 1.5]; p = 0.65). In the multivariate analysis, the factors that remained significant predictors of positive outcomes were royalties (p = 0.002) and consultant or employee status (p = 0.038). Conclusions: Self-reported Conflicts of Interest are common in orthopaedic research, particularly in the subspecialty fields of adult reconstruction of the knee, adult reconstruction of the hip, and spine. Presentations authored by individuals with a Conflict of Interest related to royalties, stock options, or consulting or employee status were significantly more likely to describe positive findings. While there may be distinct benefits associated with industry support of orthopaedic research, safeguards must be established to maintain public trust in the medical research establishment.
Oved Yosha - One of the best experts on this subject based on the ideXlab platform.
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Conflict of Interest in universal banking bank lending stock underwriting and fund management
Journal of Monetary Economics, 2001Co-Authors: Hedva Ber, Yishay Yafeh, Oved YoshaAbstract:Abstract Using a newly constructed data set on Israeli Initial Public offering (IPO) firms in the 1990s, we study costs and benefits of universal banking. We find that a firm whose equity was underwritten by a bank affiliated underwriter, when the same bank was also a large creditor of the firm in the IPO year, exhibits significantly better than average post-issue accounting performance, but that its stock performance during the first year following the IPO is considerably lower than average. When an investment fund managed by the same bank is heavily involved in the IPO as buyer of the newly issued equity, the stock performance during the first year following the IPO is even lower. This, together with negative first day returns, is indication of IPO overpricing. We interpret these findings as evidence that universal banks use their superior information regarding client firms to float the stock of the ‘cherries’, not the ‘lemons’ (as measured by post-issue accounting performance), but that bank managed funds pay too much for bank underwritten IPOs, at the expense of the investors in the funds. These results suggest that there is Conflict of Interest in the combination of bank lending, underwriting, and fund management.
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Conflict of Interest in universal banking bank lending stock underwriting and fund management
Social Science Research Network, 2000Co-Authors: Hedva Ber, Yishay Yafeh, Oved YoshaAbstract:Using a newly-constructed data set on Israeli Initial Public offering (IPO) firms in the 1990s, we study costs and benefits of universal banking. We find that a firm whose equity was underwritten by a bank-affiliated underwriter, when the same bank was also a large creditor of the firm in the IPO year, exhibits significantly better than average post-issue accounting performance, but that its stock performance during the first year following the IPO is considerably lower than average. When an investment fund managed by the same bank is heavily involved in the IPO as buyer of the newly-issued equity, the stock performance during the first year following the IPO is even lower. This, together with negative first day returns, is indicative of IPO overpricing. We interpret these findings as evidence that universal banks use their superior information regarding client firms to float the stock of the cherries, not the lemons (as measured by post-issue accounting performance), but that bank managed funds pay too much for bank underwritten IPOs, at the expense of the investors in the funds. These results suggest that there is Conflict of Interest in the combination of bank lending, underwriting, {\em and\/} fund management.
Kanu Okike - One of the best experts on this subject based on the ideXlab platform.
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potential financial Conflict of Interest among physician editorial board members of orthopaedic surgery journals
Journal of Bone and Joint Surgery American Volume, 2017Co-Authors: Charles T Mehlman, Kanu Okike, Mohit Bhandari, Mininder S KocherAbstract:The practice of medicine is based on evidence from peer-reviewed literature. As can occur with author-related funding, the integrity of the process by which manuscripts are reviewed, edited, and approved for publication may be at risk due to financial Conflict of Interest. The purpose of our study was to assess potential financial Conflict of Interest among physician editorial board members of orthopaedic surgery journals. We identified the physician editorial board members of 15 orthopaedic surgery journals and searched the 2014 payments that were archived in the Centers for Medicare & Medicaid Services Open Payments system (mandated by the Physician Payments Sunshine Act). Total dollar values were calculated and tabulated in a multilevel fashion: nothing reported, >$0 and ≤$10,000, >$10,000, >$250,000, and >$950,000. We identified 908 physician editors of 15 orthopaedic surgery journals. Something of financial value was received by 78% (712 of 908) of these individuals. Rates of editorial board potential financial Conflict of Interest for individual journals ranged from 4% to 73% in the >$10,000 category. At the >$250,000 mark, rates ranged from 0% (2 journals) to 31%. When applying the >$950,000 criterion, physician potential Conflict of Interest ranged from 0% (5 journals) to 13%. Editor-related potential financial Conflicts of Interest exist in the orthopaedic surgery journals that we analyzed. These potential financial Conflicts could possibly impact reviews.
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level of evidence and Conflict of Interest disclosure associated with higher citation rates in orthopedics
Journal of Clinical Epidemiology, 2011Co-Authors: Kanu Okike, Mininder S Kocher, Charles T Mehlman, Jennifer L Torpey, Benedict U Nwachukwu, Mohit BhandariAbstract:Abstract Objective To identify the scientific and nonscientific factors associated with rates of citation in the orthopedic literature. Study Design and Setting All original clinical articles published in three general orthopedics journals between July 2002 and December 2003 were reviewed. Information was collected on variables plausibly related to rates of citation, including scientific and nonscientific factors. The number of citations at 5 years was ascertained and linear regression was used to identify factors associated with rates of citation. Results In the multivariate analysis, factors associated with increased rates of citation at 5 years were high level of evidence (22.2 citations for level I or II vs. 10.8 citations for level III or IV; P =0.0001), large sample size (18.8 citations for sample size of 100 or more vs. 7.9 citations for sample size of 25 or fewer; P P =0.023), self-reported Conflict of Interest disclosure involving a nonprofit organization (17.4 citations for nonprofit disclosure vs. 10.6 citations for no disclosure; P =0.027), and self-reported Conflict of Interest disclosure involving a for-profit company (26.1 citations for for-profit disclosure vs. 10.6 citations for no disclosure; P =0.011). Conclusion High level of evidence, large sample size, representation from multiple institutions, and Conflict of Interest disclosure are associated with higher rates of citation in orthopedics.
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accuracy of Conflict of Interest disclosures reported by physicians
The New England Journal of Medicine, 2009Co-Authors: Kanu Okike, Mininder S Kocher, Charles T Mehlman, Erin X Wei, Mohit BhandariAbstract:BACKGROUND The recent public reporting of payments made to physicians by manufacturers of orthopedic devices provides an opportunity to assess the accuracy of physicians' Conflict-of-Interest disclosures. METHODS We analyzed the reports of payments made to physicians by five manufacturers of total hip and knee prostheses in 2007. For each payment recipient who was an author of a presentation or served as a committee member or board member at the 2008 annual meeting of the American Academy of Orthopaedic Surgeons, the disclosure statement was reviewed to determine whether the payment had been disclosed. To ascertain the reasons for nondisclosure, a survey was administered to physicians who had received payments that were not disclosed. RESULTS The overall rate of disclosure was 71.2% (245 of 344 payments). For payments that were directly related to the topic of the presentation at the meeting, the rate was 79.3% (165 of 208); for payments that were indirectly related, the rate was 50.0% (16 of 32); and for payments that were unrelated, the rate was 49.2% (29 of 59) (P=0.008). In the multivariate analysis, payments were also more likely to have been disclosed if they exceeded $10,000 (P<0.001), were directed toward an individual physician rather than a company or organization (P=0.04), or included an in-kind component (P=0.002). Among the 36 physicians who responded to the survey regarding reasons for nondisclosure (response rate, 39.6%), the reasons most commonly given for nondisclosure were that the payment was unrelated to the topic of presentation at the annual meeting (38.9% of respondents) and that the physician had misunderstood the disclosure requirements (13.9%); 11.1% reported that the payment had been disclosed but was mistakenly omitted from the program. CONCLUSIONS In this study of self-reported Conflict-of-Interest disclosure by physicians at a large annual meeting, the rate of disclosure was 79.3% for directly related payments and 50.0% for indirectly related payments.
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Conflict of Interest in orthopaedic research an association between findings and funding in scientific presentations
Journal of Bone and Joint Surgery American Volume, 2007Co-Authors: Kanu Okike, Mininder S Kocher, Charles T Mehlman, Mohit BhandariAbstract:Background: Financial Conflict of Interest has been associated with an increased likelihood that authors will report positive study outcomes. The purpose of this study was to investigate the association between types of declared Conflict of Interest and reported study outcomes in orthopaedic research. Methods: The abstracts of all podium presentations given at the 2001 and 2002 Annual Meetings of the American Academy of Orthopaedic Surgeons were analyzed by three orthopaedic surgeons with advanced training in clinical epidemiology. The findings reported in each abstract were graded as positive, negative, neutral, or not applicable. Self-reported Conflict of Interest was recorded and classified. Results: Conflicts of Interest were reported in 40.8% (212) of 519 abstracts. The interobserver reliability of the grading of the study findings was acceptable (intraclass correlation coefficient, 0.725). Rates of Conflict of Interest related to royalties, stock options, or consultant or employee status varied significantly by subspecialty field (p < 0.001). The overall rate of positive study findings was 84.0% (436 of the 519 abstracts). Positive findings were more common in studies authored by individuals with a Conflict of Interest related to royalties (98.4% [sixty of sixty-one] compared with 88.0% [381 of 433] for studies authored by individuals without a Conflict of Interest related to royalties; relative risk = 1.1 [95% confidence interval = 1.0 to 1.1]; p = 0.02), in studies authored by individuals with a Conflict of Interest related to stock options (100.0% [twenty-nine of twenty-nine] compared with 84.7% [394 of 465]; relative risk = 1.2 [95% confidence interval = 1.0 to 1.3]; p = 0.04), and in studies authored by individuals with a Conflict of Interest related to consultant or employee status (97.8% [ninety-one of ninety-three] compared with 89.0% [357 of 401]; relative risk = 1.1 [95% confidence interval = 1.0 to 1.2]; p = 0.01). Positive findings were not more common in studies authored by individuals with a Conflict of Interest related to research or institutional funding (93.5% [143 of 153] compared with 91.8% [313 of 341]; relative risk = 1.0 [95% confidence interval = 0.95 to 1.5]; p = 0.65). In the multivariate analysis, the factors that remained significant predictors of positive outcomes were royalties (p = 0.002) and consultant or employee status (p = 0.038). Conclusions: Self-reported Conflicts of Interest are common in orthopaedic research, particularly in the subspecialty fields of adult reconstruction of the knee, adult reconstruction of the hip, and spine. Presentations authored by individuals with a Conflict of Interest related to royalties, stock options, or consulting or employee status were significantly more likely to describe positive findings. While there may be distinct benefits associated with industry support of orthopaedic research, safeguards must be established to maintain public trust in the medical research establishment.
Lisa Bero - One of the best experts on this subject based on the ideXlab platform.
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Conflict of Interest as ethical shorthand understanding the range and nature of non financial Conflict of Interest in biomedicine
Journal of Clinical Epidemiology, 2020Co-Authors: Quinn Grundy, Christopher Mayes, Kelly Holloway, Sasha Mazzarello, Brett D Thombs, Lisa BeroAbstract:Abstract Objectives The aim of the study was to identify the range of issues labeled as “non-financial Conflicts of Interest” in biomedicine, articulate the associated concerns, and analyze the implications of defining these issues as Conflicts of Interest. Study Design and Setting This was a qualitative study, triangulating data from three purposively sampled sources: (1) literature, (2) policies, and (3) interviews. Participants were corresponding authors of sampled literature (December 2017 to January 2019). A critical, interpretive approach served as the analytic strategy. Results A total of 99 articles provided the sampling frame; we recruited 16 participants and sampled 20 policies. Participants labeled a wide range of personal attributes, social relationships, professional experiences, intellectual endeavors, and financial Interests as “non-financial Conflicts of Interest.” Despite a lack of consensus regarding the nature of the problem, many “non-financial” Interests are currently subject to policy action. The term serves as ethical shorthand to describe the ways that (1) “strong beliefs,” (2) “predetermined views,” (3) experiences, and (4) relationships shape evidence-led processes. Conclusion Expansion of the definition of Conflict of Interest to include non-financial Interests may have unintended consequences, including exclusion of diverse perspectives. Problems labeled “non-financial Conflicts of Interest” should be defined in terms of what they are rather than what they are not (i.e., “non”-financial). We suggest instead, preventing financial Conflicts of Interest and ensuring inclusive and equitable representation within evidence-based processes.
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improving researchers Conflict of Interest declarations
BMJ, 2020Co-Authors: Adam G Dunn, Quinn Grundy, Lisa BeroAbstract:Enforced, structured reporting and processes to assess relevance are required to make Conflict of Interest disclosures fit for purpose, argue Quinn Grundy, Adam Dunn, and Lisa Bero
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defining financial Conflicts and managing research relationships an analysis of university Conflict of Interest committee decisions
Science and Engineering Ethics, 2007Co-Authors: Elizabeth A Boyd, Lisa BeroAbstract:Despite a decade of federal regulation and debate over the appropriateness of financial ties in research and their management, little is known about the actual decision-making processes of university Conflict of Interest (COI) committees. This paper analyzes in detail the discussions and decisions of three COI committees at three public universities in California. University committee members struggle to understand complex financial relationships and reconcile institutional, state, and federal policies and at the same time work to protect the integrity of the scientific process, the autonomy and intellectual freedom of their faculty colleagues and students, and the financial Interests of the university.
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financial Conflict of Interest policies in clinical research issues for clinical investigators
Academic Medicine, 2003Co-Authors: Elizabeth A Boyd, Mildred K Cho, Lisa BeroAbstract:ABSTRACT As industry sponsorship of clinical research grows, investigators' personal financial relationships with those sponsors are under increasing scrutiny. The federal government, some states, and many universities have enacted Conflict-of-Interest policies to monitor and regulate investigators' financial relationships. Little is known, however, about investigators' awareness of or support for these policies or their attitudes toward regulatory efforts. To explore the possible implications of Conflict-of-Interest policies for clinical researchers, the authors interviewed active clinical investigators at two institutions where the Conflict-of-Interest policies differ. The most striking feature of the interviews was the range of perceptions and attitudes expressed by clinical investigators and their implications for administrators, professional societies, and policymakers concerned with Conflicts of Interest. Fewer than half of the interviewed investigators could accurately describe their campus' Conflict-of-Interest policy. Many investigators felt that professional societies, the public, and individual investigators were appropriate monitors of Conflicts of Interest. Many investigators recognized the general risks associated with Conflicts of Interest, but felt that they personally were not at risk. A fundamental challenge facing administrators and policymakers is to demonstrate to all investigators, both clinical and nonclinical, that the potential for bias, pressure and Conflict is relevant to all investigators with industry relationships.
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industry funded research and Conflict of Interest an analysis of research sponsored by the tobacco industry through the center for indoor air research
Journal of Health Politics Policy and Law, 1996Co-Authors: Deborah E Barnes, Lisa BeroAbstract:The Center for Indoor Air Research (CIAR) was created by three United States tobacco companies in 1988. Its stated mission is to fund high-quality, objective research related to indoor air, including studies of environmental tobacco smoke (ETS). Because CIAR is financed by the tobacco industry and funds research related to tobacco, it fosters an inherent Conflict of Interest. We consider whether this Conflict of Interest has affected the content, quality, or use of research funded by CIAR. We hypothesize that the tobacco industry might be using CIAR to develop scientific data to support its position that ETS is not harmful to health. CIAR funds two types of projects: "Peer-reviewed" projects are awarded after peer review by a group of scientists, whereas "special-reviewed" projects are awarded directly by tobacco industry executives. CIAR's special-reviewed projects are more likely than its peer-reviewed projects to be related to ETS, to support the tobacco industry position, and to be used by the industry to argue that smoking should not be regulated in public places. Our findings suggest that the tobacco industry is funding special-reviewed projects through CIAR to develop scientific data that it can use in legislative and legal settings. The industry may be financing peer-reviewed projects through CIAR to enhance its credibility, to provide good publicity, and to divert attention from ETS as an indoor air pollutant. CIAR's stated mission of funding high-quality, objective research has been compromised by Conflict of Interest, and at least some of CIAR's projects are being used to promote the tobacco industry's agenda.
Yishay Yafeh - One of the best experts on this subject based on the ideXlab platform.
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Conflict of Interest in universal banking bank lending stock underwriting and fund management
Journal of Monetary Economics, 2001Co-Authors: Hedva Ber, Yishay Yafeh, Oved YoshaAbstract:Abstract Using a newly constructed data set on Israeli Initial Public offering (IPO) firms in the 1990s, we study costs and benefits of universal banking. We find that a firm whose equity was underwritten by a bank affiliated underwriter, when the same bank was also a large creditor of the firm in the IPO year, exhibits significantly better than average post-issue accounting performance, but that its stock performance during the first year following the IPO is considerably lower than average. When an investment fund managed by the same bank is heavily involved in the IPO as buyer of the newly issued equity, the stock performance during the first year following the IPO is even lower. This, together with negative first day returns, is indication of IPO overpricing. We interpret these findings as evidence that universal banks use their superior information regarding client firms to float the stock of the ‘cherries’, not the ‘lemons’ (as measured by post-issue accounting performance), but that bank managed funds pay too much for bank underwritten IPOs, at the expense of the investors in the funds. These results suggest that there is Conflict of Interest in the combination of bank lending, underwriting, and fund management.
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Conflict of Interest in universal banking bank lending stock underwriting and fund management
Social Science Research Network, 2000Co-Authors: Hedva Ber, Yishay Yafeh, Oved YoshaAbstract:Using a newly-constructed data set on Israeli Initial Public offering (IPO) firms in the 1990s, we study costs and benefits of universal banking. We find that a firm whose equity was underwritten by a bank-affiliated underwriter, when the same bank was also a large creditor of the firm in the IPO year, exhibits significantly better than average post-issue accounting performance, but that its stock performance during the first year following the IPO is considerably lower than average. When an investment fund managed by the same bank is heavily involved in the IPO as buyer of the newly-issued equity, the stock performance during the first year following the IPO is even lower. This, together with negative first day returns, is indicative of IPO overpricing. We interpret these findings as evidence that universal banks use their superior information regarding client firms to float the stock of the cherries, not the lemons (as measured by post-issue accounting performance), but that bank managed funds pay too much for bank underwritten IPOs, at the expense of the investors in the funds. These results suggest that there is Conflict of Interest in the combination of bank lending, underwriting, {\em and\/} fund management.