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: Suggested Citation