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Stock market liquidity and the rights offer paradox

dc.contributor.authorRiva, Fabrice
dc.contributor.authorGinglinger, Edith
dc.contributor.authorKoenig-Matsoukis, Laure
dc.date.accessioned2010-01-18T14:19:47Z
dc.date.available2010-01-18T14:19:47Z
dc.date.issued2009-01
dc.identifier.urihttps://basepub.dauphine.fr/handle/123456789/3035
dc.language.isoenen
dc.subjectbid-ask spreaden
dc.subjectSecurity offeringen
dc.subjectSEOen
dc.subjectflotation methoden
dc.subjectflotation costsen
dc.subjectrights issuesen
dc.subjectpublic offeringsen
dc.subjectliquidityen
dc.subject.ddc658.1en
dc.subject.classificationjelG32en
dc.titleStock market liquidity and the rights offer paradoxen
dc.typeCommunication / Conférence
dc.description.abstractenThis paper contributes to the resolution of the rights offer paradox, using a database of French SEOs. We first document higher direct flotation costs, but also improved stock market liquidity after public offerings and standby rights relative to uninsured rights. We find that blockholder renouncements to subscribe to new shares and stock market liquidity are important determinants of flotation method choice. After controlling for endogeneity in the choice of flotation method, we find that public offerings are cost effective and more liquidity improving than standby rights whereas an uninsured rights offering is the best choice for low liquidity, closely held firms. Our results provide new insights as to why firms choose public offerings despite apparently higher costs.en
dc.identifier.citationpages28en
dc.description.sponsorshipprivateouien
dc.subject.ddclabelOrganisation et finances d'entrepriseen
dc.relation.conftitle22nd Australasian Finance and Banking Conferenceen
dc.relation.confdate2009-12
dc.relation.confcitySydneyen
dc.relation.confcountryAustralieen


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