Why don’t U.S. issuers demand European fees for IPOs?
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. The same banks dominate both markets b...
| Main Authors: | , , |
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| Format: | Working paper |
| Language: | English |
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Oxford Finance
2010
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| _version_ | 1797068752610656256 |
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| author | Abrahamson, M Jenkinson, T Jones, H |
| author_facet | Abrahamson, M Jenkinson, T Jones, H |
| author_sort | Abrahamson, M |
| collection | OXFORD |
| description | 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. 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 strategic pricing. U.S. issuers could have saved over $1bn a year by paying European fees. |
| first_indexed | 2024-03-06T22:14:38Z |
| format | Working paper |
| id | oxford-uuid:52faf188-3b89-4372-9519-df54ec49d169 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T22:14:38Z |
| publishDate | 2010 |
| publisher | Oxford Finance |
| record_format | dspace |
| spelling | oxford-uuid:52faf188-3b89-4372-9519-df54ec49d1692022-03-26T16:28:50ZWhy don’t U.S. issuers demand European fees for IPOs?Working paperhttp://purl.org/coar/resource_type/c_8042uuid:52faf188-3b89-4372-9519-df54ec49d169EnglishDepartment of Economics - ePrintsOxford Finance2010Abrahamson, MJenkinson, TJones, HWe 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. 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 strategic pricing. U.S. issuers could have saved over $1bn a year by paying European fees. |
| spellingShingle | Abrahamson, M Jenkinson, T Jones, H Why don’t U.S. issuers demand European fees for IPOs? |
| title | Why don’t U.S. issuers demand European fees for IPOs? |
| title_full | Why don’t U.S. issuers demand European fees for IPOs? |
| title_fullStr | Why don’t U.S. issuers demand European fees for IPOs? |
| title_full_unstemmed | Why don’t U.S. issuers demand European fees for IPOs? |
| title_short | Why don’t U.S. issuers demand European fees for IPOs? |
| title_sort | why don t u s issuers demand european fees for ipos |
| work_keys_str_mv | AT abrahamsonm whydontusissuersdemandeuropeanfeesforipos AT jenkinsont whydontusissuersdemandeuropeanfeesforipos AT jonesh whydontusissuersdemandeuropeanfeesforipos |