Does market timing persistently affect capital structure? Evidence from stock market liberalization

I-Hsiang Huang

Pacific-Basin Finance Journal, 2014, vol. 26, issue C, 123-144

Abstract: Utilizing stock-market liberalization, we test whether managers exploit favorable market conditions to time their firms' IPOs, and whether or not the timing will have a persistent, negative impact on leverage. Using a sample of 235 Taiwanese IPOs over the 10-year period surrounding the first liberalization in the Taiwan stock market, a high-volatility, high-turnover, high-individual-trading emerging market, we first show that liberalization substantially reduces the cost-of-equity capital. We then provide evidence that the going-public decision for post-liberalization IPOs is consistent with equity market timing, but that it fails to influence the debt ratio.

Keywords: Capital structure; Market timing; Stock market liberalization; IPO (search for similar items in EconPapers)
JEL-codes: F3 G32 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X13000899
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: https://EconPapers.repec.org/RePEc:eee:pacfin:v:26:y:2014:i:c:p:123-144

DOI: 10.1016/j.pacfin.2013.12.001

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().