What Determines IPO Gross Spreads in Europe?

Posted: 7 Mar 2002


This paper examines the behavior of underwriting gross spreads in European IPO markets using a data set of 565 IPOs by European issuers in the period 1986 - 1999. Privatizations have lower gross spreads than other IPOs, other things remaining equal. Gross spreads on European listings by European issuers are significantly lower than on U.S. listings by European issuers, except on the technology stock - oriented EASDAQ and Frankfurt Neuer Markt exchanges. IPOs involving a U.S. bulge bracket underwriter (for joint U.S./Europe listings) or bookbuilding are characterized by relatively higher spreads.

Keywords: initial public offerings, gross spreads

JEL Classification: G24, G32

Suggested Citation

Torstila, Sami, What Determines IPO Gross Spreads in Europe?. European Financial Management Journal, Vol. 7, No. 4, pp. 523-541. Available at SSRN: https://ssrn.com/abstract=301799

Sami Torstila (Contact Author)

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101
+358 40 353 8069 (Phone)

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