Relation between underwriting spread and underpricing in initial public offerings
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Bachelor's thesis
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Authors
Date
2023
Department
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
20 + 2
Series
Abstract
In this paper, I examine the relationship between underwriting spread and underpricing in initial public offerings in the Asia-Pacific market during the 21st century. I cross-sectionally regress underpricing against underwriting spreads while controlling variables that prior research suggests to influence underpricing or spreads. My findings indicate a positive and significant relationship between underwriting spread and underpricing, suggesting a complementarity between these costs. Additionally, my results indicate that less profitable issuers are more underpriced, and charged higher spreads compared to more profitable issuers.Description
Thesis advisor
Kokkonen, JoniKeywords
initial public offering, underpricing, underwriting spread, 21st century