Abstract
In this paper, we explore the effects of pricing and non-pricing competitive factors on banks’ market shares as underwriters. Using a panel of underwriters in the European corporate bond markets from 2006-2013, we find that pricing factors are of second-order importance in explaining changes in underwriters’ market shares. Our results show that underwriting market shares exhibit a degree of persistency over time since prior market shares explain current market shares. Furthermore, providing joint lending and underwriting services, hiring star analysts for the underwriting team and being the leader bank placing bonds in a particular industry affects positively underwriters’ market shares.
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