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The gravity of syndication ties in international equity underwriting

Author

Listed:
  • Milsom, Luke

    (University of Oxford)

  • Pažitka, Vladimír

    (University of Leeds)

  • Roland, Isabelle

    (Bank of England)

  • Wójcik, Dariusz

    (University of Oxford)

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.

Suggested Citation

  • Milsom, Luke & Pažitka, Vladimír & Roland, Isabelle & Wójcik, Dariusz, 2023. "The gravity of syndication ties in international equity underwriting," Bank of England working papers 1021, Bank of England.
    • Handle: RePEc:boe:boeewp:1021
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    More about this item

    Keywords

    Gravity; international trade; international finance; equity securities underwriting; cross-border bank linkages; financial geography;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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