Abstract
This paper examines impact of hiring reputable auditors, underwriters, and lawyers, "namely, the three musketeers", by issuing firms on the global IPO underpricing. We employ large and unique dataset of 24,312 IPOs in 22 countries between 1995 and 2019. We find that issuers benefit from hiring the three musketeers to certify issuers' quality to reduce investors' ex-ante uncertainty to guard their offerings from underpricing. Results show significant differences of the impact of the three musketeers on underpricing in countries with different market sophistication, auditing and reporting standards, and rule of law. Our results reveal that issuers may want to be careful when hiring quality auditors, underwriters, and lawyers when going public since not all those reputable intermediaries are equally important in alleviating underpricing. Our research has implications for IPO owners, investors, researchers, and regulators.