Journal article
Why Don’t U.S. Issuers Demand European Fees for IPOs?
- Abstract:
- We compare fees charged by investment banks for conducting IPOs in the United States and Europe. In recent years, the "7% solution," as documented by Chen and Ritter (2000), has become even more prevalent in the United States, and is now the norm for IPOs raising up to 250 million dollars. The same banks dominate both markets, but European IPO fees are roughly three percentage points lower, are much more variable, and have been falling. We review explanations for the gap in spreads and find the evidence consistent with strategic pricing. U.S. issuers could have saved over 1 billion dollars a year by paying European fees.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
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- Files:
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(Preview, Accepted manuscript, pdf, 887.4KB, Terms of use)
-
- Publisher copy:
- 10.1111/j.1540-6261.2011.01699.x
Authors
- Publisher:
- Wiley
- Journal:
- Journal of Finance More from this journal
- Volume:
- 66
- Issue:
- 6
- Pages:
- 2055–2082
- Publication date:
- 2011-01-01
- DOI:
- EISSN:
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1540-6261
- ISSN:
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0022-1082
- UUID:
-
uuid:133d4a6f-f917-40bd-8c2d-46ee77f70863
- Local pid:
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oai:eureka.sbs.ox.ac.uk:1369
- Deposit date:
-
2012-01-04
Terms of use
- Copyright holder:
- American Finance Association
- Copyright date:
- 2011
- Notes:
- This is the peer reviewed version of the following article: Abrahamson M, Jenkinson T, Jones H. Why Don’t U.S. Issuers Demand European Fees for IPOs?. The Journal of Finance. Wiley-Blackwell; 2011. p. 2055–82., which has been published in final form at http://dx.doi.org/10.1111/j.1540-6261.2011.01699.x. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
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