Relation between underwriting spread and underpricing in initial public offerings

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School of Business | Bachelor's thesis
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Date
2023
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.
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Thesis advisor
Kokkonen, Joni
Keywords
initial public offering, underpricing, underwriting spread, 21st century
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