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We investigate IPO market efficiency using a sample of equity carve-outs offered during the period of 1985-2005. Unlike IPOs examined in previous studies where trading during the pre-IPO book-building period does not exist and trading on the IPO date is rationed, in equity carve-outs, investors...
Persistent link: https://www.econbiz.de/10012710500
In this article we show that in a finitely liquid market with asymmetrically informed investors, both the benefits and the costs of diversification vary with the return and risk of the investment opportunities of the firm's divisions. The benefits come from a reduced liquidity discount in the...
Persistent link: https://www.econbiz.de/10012710591
A firm’s initial public offering (IPO) generates negative externalities for industry competitors. To mitigate this threat, incumbent firms manage their earnings downwards, issue more negative management forecasts, and use a more negative disclosure tone when industry peers file for an IPO....
Persistent link: https://www.econbiz.de/10013244666
Using a sample of venture capital (VC)-backed initial public offering (IPO) firms, we study the effect of financial intermediaries' tight leash on entrepreneurs' innovation productivity. We find that financial intermediaries' tight leash impedes innovation: IPO firms are significantly less...
Persistent link: https://www.econbiz.de/10013062619
In this paper, I survey the recent research in corporate finance on financial securities frauds. I structure my review around three subjects in this literature: studies on internal and external factors that elicit managerial incentives for fraudulent activities, studies on regulatory and...
Persistent link: https://www.econbiz.de/10013063312
Using a proprietary database from a large Chinese state-owned bank, we examine whether information evolved from banking relationships predicts commercial loan default by industrial firms. We find that the bank's relationship information is significantly linked to the incidence of default, and...
Persistent link: https://www.econbiz.de/10013063634
Using a proprietary database from a large Chinese state-owned bank, we examine whether information evolved from banking relationships predicts commercial loan default by industrial firms. We find that the bank's relationship information is significantly linked to the incidence of default, and...
Persistent link: https://www.econbiz.de/10012750928
We present evidence that firms attempting IPOs learn from the experience of their contemporaries. These information spillovers affect revisions in offer terms and the decision whether to carry through with an offering. The evidence also supports the argument that IPOs are implicitly bundled as a...
Persistent link: https://www.econbiz.de/10012751140
We present evidence that firms attempting IPOs learn from the experience of theircontemporaries. These information spillovers affect revisions in offer terms and the decision whether to carry through with an offering. The evidence also supports the argument that IPOs are implicitly bundled as a...
Persistent link: https://www.econbiz.de/10012751166
This paper investigates how a firm's capital structure choice affects the informational efficiency of its security prices in the secondary markets. We identify two new determinants of a firm's capital structure policy: liquidity (adverse selection) premium due to investors' anticipated losses to...
Persistent link: https://www.econbiz.de/10012751354