Determinants of IPO Gross Spreads: Theory and Evidence

摘要：

Chen and Ritter (2000) document that the gross spreads of medium- size IPOs cluster at seven percent. They argue that investment banks collude to charge gross spreads above competitive levels. In this paper, we show that gross spreads may cluster in efficient contracts. In equi- librium, the optimal gross spread does not depend on underwriting cost when investor sentiment is high. That is, gross spreads may clus- ter even when there are economies of scale in underwriting cost. The model generates several testable predictions. We find strong support for the model.

作者: Feng Zhang

作者单位: Sauder School of Business University of British Columbia

会议类型: 国际会议

会议名称: 2007年中国金融国际年会

会议地点: 成都

会议语种:英文

页码: 1-35

在线出版日期: 2007-07-09（万方平台首次上网日期，不代表论文的发表时间）