Industrial structure in the Eurocredit underwriting market

While the complexity of underwriting syndicates is well-known there has been very little empirical analysis of syndicate structure. The short-term Eurocredit market is a promising market for the analysis of industrial structure because underwriting syndicates generally come in a two-tier structure. The structures of syndicates in this market are analyzed here empirically. Our evidence suggests that the lead managers in these syndicates seem to be recruited primarily for paycosts of risk bearing and sharing, while the regular managers appear to be recruited primarily for the purpose of dealing with expanded underwriting distribution, risks held constant. Contract parameters that affect syndicate size and structure are examined in detail for various instruments. (JEL G20). Copyright [C] 1996 Elsevier Science Ltd