Business, Management and Accounting
4 years ago

Investment banks compete fiercely in IPOs, driving down costs for companies.

Journal of Financial Economics
Do investment banks compete in IPOs?: the advent of the “7% plus contract”
Richard A. Hansen

Paper Summary

Investment banks do not collude to profit from 7% initial public offerings (IPOs). The 7% spread is not unusually profitable, and competition exists in pricing these IPOs based on reputation and services offered. This suggests that the 7% contract is an efficient innovation for IPOs, rather than a result of collusion among banks.

Related papers

Business, Management and Accounting
4 years ago

Investment banks compete fiercely in IPOs, driving down costs for companies.

Corporate Governance
Banking Finance
Venture Capital
1 view
Business, Management and Accounting
4 years ago

Investment banks' reputation impacts IPO stock performance in long run.

Corporate Governance
Earnings Management
Asset Pricing
Business, Management and Accounting
7 years ago

Auditors' Risk Evaluation Impacts IPO Success and Audit Fees.

Earnings Management
Corporate Governance
Value-based Management