Economics at your fingertips  

Policy uncertainty and seasoned equity offerings methods

Man Dang (), Premkanth Puwanenthiren, Hong An Thai, Mieszko Mazur, Edward Jones and Xuan Vinh Vo

International Review of Financial Analysis, 2021, vol. 77, issue C

Abstract: Based on a sample of U.S. seasoned equity offering (SEO) during the period 2002–2017, we examine how the choice of equity issuance method changes in response to policy uncertainty. We find that firms subject to high policy uncertainty are less likely to use accelerated offerings rather than other types of traditional seasoned equity offerings. Our results are robust to alternative variable specifications, propensity score matching method, IV approach, and the inclusion of additional controls. Also, the effect of policy uncertainty on accelerated offering decision is weaker for firms with better information environment, earnings quality, and governance structures. Further, policy uncertainty increases the cost of funds and lowers long-run abnormal returns after SEOs for firms subject to high levels of policy uncertainty.

Keywords: Seasoned equity offerings; Policy uncertainty; Multinomial logistic regression; Propensity score matching, IV approach (search for similar items in EconPapers)
JEL-codes: G24 G32 G38 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.irfa.2021.101830

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-12-18
Handle: RePEc:eee:finana:v:77:y:2021:i:c:s1057521921001642