Gross spreads received by underwriters on initial public offerings (IPOs) in the Korea are much lower than in the United States. Patterns of clustering in IPO gross spreads can be identified in the Korea, in recent years more than 18 percent of deals have spreads of exactly 4%. We examine several features of the IPO underwriting business that result in a market structure where spreads are wide dispersion.
This paper analyses gross spreads in Korea IPOs using a data set of IPOs from 2000 to July 2006.
The paper examines the development of spreads in Korea markets, by the type of offering and underwriter, and over time, to find evidence on the level of gross spreads in Korea.
