Bankers appear to play a special role in providing commitment-based financing to corporations. This type of lending is important not only for small firms that lack access to public debt markets but for large and medium-size companies as well. For such companies, commitment-based financing...

This paper investigates the effect of setup costs on the pricing of investment banking services. The existence of setup costs is predicted to result in lower underwriter spreads in initial public offerings for firms that are expected to issue again. Consistent with this prediction, the author...