Wealth effects of seasoned equity offerings: A meta-analysis
We use meta-analysis to review studies on announcement effects associated with seasoned equity offerings. Our sample includes 199 studies from 38 leading finance journals and Social Sciences Research Network working papers. The studies cover different countries, but the US is particularly wellrepresented with 131 studies. We find a statistically significant mean cumulative abnormal return of −0.98%. Abnormal returns are more negative for equity issues by US companies and for non-US rights issues and are less negative for private placements. In addition, wealth effects are more negative when the proceeds are used for debt reduction, when the SEO is issued shortly after IPO, and for issues by nondividend-paying companies and industrial companies. We identify important avenues for future research.
|JEL||Information and Market Efficiency; Event Studies (jel G14), Corporate Finance and Governance: General (jel G30), Financing Policy; Capital and Ownership Structure (jel G32)|
|Persistent URL||dx.doi.org/10.1111/irfi.12218, hdl.handle.net/1765/112754|
|Journal||International Review of Finance|
Veld, C, Verwijmeren, P, & Zabolotnyuk, Y. (2018). Wealth effects of seasoned equity offerings: A meta-analysis. International Review of Finance, Accepted. doi:10.1111/irfi.12218