Do investment banks compete in IPOs?: the advent of the 7% plus contract

• 成果类型: Article
• 署名作者: Hansen, RS
• 署名单位: University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(00)00089-1
• 发表日期: 2001
• 页码: 313-346
• 关键词: initial public offerings; Going public; investment banking; Underpricing; underwriter compensation

摘要

The large number of initial public offerings (IPOs) with a 7% spread suggests either that investment bankers collude to profit From 7% IPOs or that the 7% contract is an efficient innovation that better suits the IPO. My tests do not support the collusion theory. Low concentration and ease of entry characterize the IPO market. Moreover, the 7% spread is not abnormally profitable, nor has its use been diminished by public awareness of collusion allegations. In support of the efficient contract theory, banks compete in pricing 7% IPOs on the basis of reputation, I pricing. (C) 2001 Elsevier Science S.A. All rights reserved. JEL classification. G32: G34.