The DOI matches its Crossref record; 2 of the 2 references it cites were found in a registry or an index.
Are There Economies of Scale in Underwriting Fees? Evidence of Rising External Financing Costs
Abstract
This study examines the behavior of spreads paid in firm underwritten seasoned common stock offerings and straight bond offerings. Estimates indicate that up to 85% of the spread is variable cost and that the marginal spread is rising. Further, offerings that are likely to require greater underwriting services encounter higher marginal spreads. These findings are consistent with there being a family of U-shaped spreads, with lower quality offerings priced on higher spreads, unlike the economies of scale view of spreads. They agree with the views that underwriters provide valuable services and that the marginal cost of external finance is rising.
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Citations
Cites
Corporate financing and investment decisions when firms have information that investors do not have
Myers, S. C., & Majluf, N. S. (1984) · Journal of Financial Economics · doi:10.1016/0304-405x(84)90023-0 · Cited by 18,957
Valuation effects of security offerings and the issuance process
Mikkelson, W. H., & Partch, M. M. (1986) · Journal of Financial Economics · doi:10.1016/0304-405x(86)90049-8 · Cited by 1,213
Cited by
Capital structure decisions: Which factors are reliably important?
Frank, M. Z., & Goyal, V. K. (2009) · Financial Management · doi:10.1111/j.1755-053x.2009.01026.x · Cited by 2,859
A Review of Empirical Capital Structure Research and Directions for the Future
Graham, J. R., & Leary, M. T. (2011) · Annual Review of Financial Economics · doi:10.1146/annurev-financial-102710-144821 · Cited by 547
Dynamic Models and Structural Estimation in Corporate Finance
Strebulaev, I. A. (2011) · Foundations and Trends® in Finance · doi:10.1561/0500000035 · Cited by 259
Farre-Mensa, J., Michaely, R., & Schmalz, M. (2025) · Journal of Financial and Quantitative Analysis · doi:10.1017/s0022109024000231 · Cited by 54
Metadata
- Authors
- Altınkılıç, O., & Hansen, R. S.
- Venue
- Review of Financial Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 2000-01
- Volume
- 13
- Issue
- 1
- Pages
- 191-218
- ISSN
- 0893-9454 (ISSN-L)
- 1465-7368
- OpenAlex
- W2157749655
- Cited by
- 554
- References
- 2
- FWCI
- 60.45
- Type
- journal article
- Language
- en
- Open access
- closed
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- Altınkılıç, O., & Hansen, R. S. (2000). Are There Economies of Scale in Underwriting Fees? Evidence of Rising External Financing Costs. Review of Financial Studies. https://doi.org/10.1093/rfs/13.1.191
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
