Effects of market timing on primary share issues in the Brazilian capital market

Matheus da Costa Gomes, Vinícius Medeiros Magnani, Tatiana Albanez and Mauricio Ribeiro do Valle

The North American Journal of Economics and Finance, 2019, vol. 49, issue C, 361-377

Abstract: This paper analyzes the occurrence of market timing and its effects on primary share issues (IPOs and SEOs) of 123 Brazilian firms in the 2004–2015 period, by investigating the relation between the cumulative abnormal returns and amount of proceeds raised. We use cumulative abnormal returns, before and after the share issue, as a proxy for equity market timing. The results indicate the existence of market timing in the decision to issue shares in the Brazilian capital market, reflected in the abnormal returns, resulting in obtaining a larger volume of resources by the companies practicing this behavior.

Keywords: Capital structure; Financing decisions; Equity market timing; Windows of opportunity; Brazilian capital market (search for similar items in EconPapers)
JEL-codes: G10 G12 G30 G32 M10 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:49:y:2019:i:c:p:361-377

DOI: 10.1016/j.najef.2019.03.022

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