Why can managers time the market in issuing new equity? The global evidence

Carol Wang

Journal of Multinational Financial Management, 2011, vol. 21, issue 3, 151-164

Abstract: Recent studies find that aggregate equity issues predict market returns in the U.S. market. In this research, I examine whether such predictive effect exists in the global stock market. I use an aggregate approach across 41 countries with diverse legal regimes. The results confirm the presence of predictability of aggregate equity issues in the global market. In addition to aggregate equity shares, the annual frequency of equity issues also appears to be a strong predictor of market stock returns. Furthermore, I find that the predictive power is related to the level of information asymmetry in a country due to cross country differences in legal protections and accounting disclosure standards.

Keywords: International; financial; markets; Managerial; market; timing; Information; and; market; efficiency (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:21:y:2011:i:3:p:151-164

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