The Impact of Commercial Banks on Underwriting Spreads: Evidence from Three Decades

Dongcheol Kim · Darius N. Palia · Anthony Saunders

56 citations0/0 files storedJournal of Financial and Quantitative Analysis

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Banking stability, regulation, efficiency Credit Risk and Financial Regulations

Abstract

Abstract This paper examines the effect of commercial bank entry on underwriting spreads for IPOs, SEOs, and debt issues using a long time series that spans 30 years, from 1975 to 2004. We find that, on average, commercial banks charge lower spreads of approximately 72 basis points for IPOs, 43 basis points for SEOs, and 14 basis points for debt over the entire sample period. The economic impact of commercial banks on lowering underwriting spreads is most significant when commercial banks were allowed to enter via Section 20 subsidiaries but persists beyond. Commercial bank entry into underwriting appears to have a procompetitive effect that lasts many years after their initial entry.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 56 citations exist upstream.

References

1990Initial Public Offerings and Underwriter Reputation 2002Why Don’t Issuers Get Upset About Leaving Money on the Table in IPOs?1986Information quality and the valuation of new issues 1986Capital raising, underwriting and the certification hypothesis 1994Investment Bank Reputation, Information Production, and Financial Intermediation 2000The Seven Percent Solution 2000Are There Economies of Scale in Underwriting Fees? Evidence of Rising External Financing Costs 1996Issuer Expenses and Legal Liability in Initial Public Offerings

Cited by

2011Securities litigation, withdrawal risk and initial public offerings 2014Credit market frictions and capital structure dynamics 2021Government support for SMEs in response to COVID-19: theoretical model using Wang transform 2014Bank Capital, Liquid Reserves, and Insolvency Risk 2022Debt dynamics with fixed issuance costs

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.