Who Chooses Whom? : Syndication, Skills and Reputation


Tykvová, Tereza


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URL: http://ub-madoc.bib.uni-mannheim.de/1191
URN: urn:nbn:de:bsz:180-madoc-11912
Document Type: Working paper
Year of publication: 2005
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: D83 G32 L14 ,
Subject headings (SWD): Syndikalismus , Prestige , Lernen
Abstract: Syndication, which is a joint realization of one project/one investment by several capital providers, is a long existing phenomenon that plays a central role in many financial market segments. Within this paper we develop a theoretical model focusing on the dynamic aspect of syndication, namely the know-how transfer between syndication partners and their ability to learn. The core of the analysis checks whether repeated relationships and, thus, reputational concerns outweigh the temptation to renege on a given contract. Throughout the paper, we investigate two key topics. The first consists of the conditions under which investors syndicate their deals. The second focuses on who chooses whom. We show that experienced financiers may partner with either other experienced investors (in order to raise the success probability of a project) or with unskilled investors (who can gain knowledge). We further demonstrate that sometimes the syndication is impeded because the financier believes that his partner has strong incentives to either renege on a contract (hold-up problem) or to shirk (moral hazard problem).
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Tykvová, Tereza (2005) Who Chooses Whom? : Syndication, Skills and Reputation. Open Access [Working paper]
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