Are There Economies of Scale in Underwriting Fees? Evidence of Rising External Financing Costs

By Oya Altinkiliç, Robert S. Hansen. 2000

594 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/328dea5fa0f0afb0a9e8249799f6075d2fa03662

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Citations in the corpus

The Role of Debt and Equity Finance Over the Business Cycle (2012, background): “Hansen and Torregrosa (1992), and Altinkiliç and Hansen (2000), show that underwriting fees do indeed display increasing marginal costs.”
Do investment banks compete in IPOs?: the advent of the "7% plus contract" (2001, background): “Negotiated spreads normally decline with issue size because of economies of scale in underwriting and because larger, higher quality "rms tend to have larger issues ( Altmnkmlmi and Hansen, 2000 ).”
The expected cost of default (2016, background): “The cost of debt issuance, φD is set to match the costs found in Altinkilic and Hansen (2000). (26)Additional details can be found in Appendix E”
So What Do I Get? The Bank's View of Lending Relationships (2007, background): “Existing theories predict that establishment of strong lender-borrower relationships can generate significant benefits for the lender.(2) Empirical evidence on the benefits of banking relationships has largely focused on documenting these benefits to the borrower.”
Debt Capacity and Tests of Capital Structure Theories (2010, background): “Thus, the size of a debt issue required to cover the external financing needs is also small and would not warrant bearing the fixed cost of a public debt offering (Altinkiliç and Hansen (2000)).”
Testing Q theory with financing frictions (2007, result): “This modeling approach is consistent with the findings of Altinkilic and Hansen (2000), who show that underwriting fees are increasing in the size of the issuance and decreasing in the size of the firm.”
Does Prospect Theory Explain IPO Market Behavior (2005, methodology): “Following Altinkilic and Hansen (2000), we model SEO spreads as decreasing in the amount raised at the SEO (in log real dollars) and firm quality (measured using the volatility of daily stock returns estimated over the 230 trading days ending 20 days before the SEO,(18) the EPS dummy used earlier, a”
Wanna Dance? How Firms and Underwriters Choose Each Other (2005, unknown): “Following Hansen (2001) and Altinkilic and Hansen (2000), among others, we use only INDUSTRIAL firms in our tests, where we classify a firm as INDUSTRIAL if its Standard Industrial Classification (SIC) code is not between 4000-4999 (utilities) or between”
Stock Market Liquidity and the Cost of Issuing Equity (2005, background): “Finally, there is evidence that riskier firms have higher costs of raising capital (see for example, Altinkilic and Hansen (2000)).”
The Aggregate Dynamics of Capital Structure and Macroeconomic Risk (2010, background): “3% (Altinkilic and Hansen (2000)). We assume that the issuance cost, φνt , is 3% (1%) in a contraction (expansion). An obvious explanation is that it takes more effort and time to refinance firm’s debt obligations in a contraction, as anecdotal evidence strongly suggests. Another rationale is provid”
The Pecking Order, Debt Capacity, and Information Asymmetry (2010, unknown): “For example, transaction costs could generate a pecking order since issuance costs increase as we move from internal funds (no cost) to debt and then to equity (Altinkilic and Hansen, 2000).”