Non-pricing drivers of underwriters’ market shares in corporate bond markets

Santiago Carbó-Valverde, Pedro Cuadros-Solas () and Francisco Rodríguez-Fernández
Authors registered in the RePEc Author Service: Santiago Carbo Valverde

International Review of Economics & Finance, 2021, vol. 76, issue C, 671-693

Abstract: Banks' role as underwriters has gained relevance, fostering competition for market share in this traditional investment banking activity. This paper explores the effects of competitive pricing and non-pricing factors on banks’ market share as underwriters. Using a panel of active-underwriters in the European corporate bond markets during a highly competitive period (2007–2013), we find that pricing factors are of second-order importance in explaining changes in market shares. Providing joint lending and underwriting services, hiring star-analysts, and being the leader in placing bonds within an industry positively affect market share. These results explain how banks have developed their underwriting businesses.

Keywords: Underwriters; Market shares; Bond; Lending; Competitive forces (search for similar items in EconPapers)
JEL-codes: G21 G24 H81 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:76:y:2021:i:c:p:671-693

DOI: 10.1016/j.iref.2021.07.011

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