We compare the fees charged by investment banks for conducting IPOs in the U.S. and Europe. In recent years the “7% solution”, as documented by Chen and Ritter (2000), has become even more prevalent in the U.S., and is now the norm for IPOs raising up to 250m dollars. The same banks dominate both markets but European IPO fees are roughly three percent lower, are much more variable, and have been falling. We review explanations for the gap in spreads and find the evidence consistent with strat...Expand abstract
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- Peer reviewed
- Accepted Manuscript
- Copyright holder:
- American Finance Association
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- 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.
Why don't U.S. issuers demand European fees for IPOs?
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