Private placements of common equity and the industry rival response

Scott Besley, Ninon Kohers and Tanja Steigner

Applied Financial Economics, 2007, vol. 17, issue 7, 559-568

Abstract: This study examines the intra-industry signalling effects of private equity issue announcements. The results show that the average industry reaction to a private equity announcement is negative. However, evidence of a contagion effect also exists. Specifically, the competitive response among industry rivals is significantly stronger for private equity issues during bear stock markets. In fact, the industry rival reaction for nonhigh-tech firms is significantly negative during bear markets only, while it is significantly positive during bull markets. These findings highlight the importance of stock market conditions in influencing the signals sent by private equity issues and the resulting shareholder wealth effects.

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/09603100600706741 (text/html)
Access to full text is restricted to subscribers.

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:taf:apfiec:v:17:y:2007:i:7:p:559-568

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAFE20

DOI: 10.1080/09603100600706741

Access Statistics for this article

Applied Financial Economics is currently edited by Anita Phillips

More articles in Applied Financial Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().