Are Initial Returns and Underwriting Spreads in Equity Issues Complements or Substitutes?
研究股权发行中承销价差与初始回报的关系，发现两者正相关，且低质量发行者需支付更高的承销价差和初始回报。
The objective of this paper is to analyze the joint behavior of underwriting spreads and initial returns on equity issues for a large sample of issues over a 21‐year period. Traditional empirical approaches to the determination of these direct and indirect issuing costs view them as independent. Using a three‐stage least squares approach, we find these costs to be positively and significantly related. In the case of seasoned equity offerings, our results are robust to replacing initial returns with the offer price discount. We also find that low quality issuers are charged higher underwriting spreads and initial returns when compared to high quality issuers.