Endogenous market choice, listing regulations and IPO spread: Evidence from the London Stock Exchange

Hafiz Hoque ()
Additional contact information
Hafiz Hoque: Swansea University

No 2022-02, Working Papers from Swansea University, School of Management

Abstract: This study examines the endogenous market choice and its impact on underwriter spread if AIM IPOs that meet Main Market (MM) listing requirements had issued equity in the MM during the 1995-2021 period. We find that the spread is 1.33% higher in the AIM than the MM for IPO listings that meet the MM listing requirements. This finding suggests that AIM companies, meeting the MM listing requirements, could have saved more than £100 million by going public through the MM than the AIM market. We also find that this spread differential is attributed to the issuing firms’ market self-selection. We also find that listing requirements in the MM has an impact on the gross spread. The Propensity score matching results show that AIM firms that meet the MM market listing requirements pay a 0.921% higher spread which is significant at a 1% level compared to the MM market IPOs.

Keywords: Gross Spread; Listing requirements; Heckman Selection model; underwriter fixed effects; Propensity Score Matching (search for similar items in EconPapers)
JEL-codes: G15 G24 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2022-12-05
New Economics Papers: this item is included in nep-cfn
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://rahwebdav.swan.ac.uk/repec/pdf/WP2022-02.pdf First version, 2022 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:swn:wpaper:2022-02

Access Statistics for this paper

More papers in Working Papers from Swansea University, School of Management Contact information at EDIRC.
Bibliographic data for series maintained by Syed Shabi-Ul-Hassan ().