The gravity of syndication ties in international equity underwriting

Luke Milsom (), Vladimír Pažitka (), Isabelle Roland () and Dariusz Wójcik ()
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Luke Milsom: University of Oxford
Vladimír Pažitka: University of Leeds
Isabelle Roland: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH
Dariusz Wójcik: University of Oxford

No 1021, Bank of England working papers from Bank of England

Abstract: We examine how cross-border syndication ties reduce information frictions and positively impact exports of equity underwriting services. Using a panel data set from 2000–15, we develop a measure of information flows based on ‘core syndication ties’ where the lead underwriter is in either the importing or exporting country. We find that new core syndication ties have a significant and positive effect on exports. This finding is supported by evidence from ‘peripheral syndication ties’, which are associated with smaller information flows, and an instrumental variable approach which focuses on plausibly exogenous supply-side shocks. Furthermore, the effect of new core syndication ties is stronger when information frictions between trading partners are more severe and for more information-sensitive transactions like IPOs.

Keywords: Gravity; international trade; international finance; equity securities underwriting; cross-border bank linkages; financial geography (search for similar items in EconPapers)
JEL-codes: F14 F23 F36 F65 G15 G24 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2023-04-14
New Economics Papers: this item is included in nep-ifn and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:1021

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