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The Clustering of IPO Gross Spreads: International Evidence

Published online by Cambridge University Press:  06 April 2009

Sami Torstila
Sami Torstila
Affiliation:
torstila@hkkk.fi, Helsinki School of Economics, PO Box 1210, FIN-00101 Helsinki, Finland.
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Abstract

Patterns of clustering in IPO gross spreads can be identified not only in the U.S., but also in many other markets across the world. The evidence indicates, however, that these clustering patterns are not necessarily collusive. Clustering is widespread in many countries with low gross spreads. In fact, the amount of clustering observed is negatively related to the gross spread level of a country. Additionally, an analysis of abnormal gross spreads following Hansen (2001) indicates that few clusters contain abnormal positive surpluses.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 38 , Issue 3 , September 2003 , pp. 673 - 694
Copyright
Copyright © School of Business Administration, University of Washington 2003

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