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Title: A comparison of the stock market reactions of convertible bond offerings between financial and non-financial institutions: do they differ?
Authors: Li, Hui
Liu, Hong
Siganos, Antonios
Keywords: Convertible bond announcement effect
Financials
Regulation
Issue Date: 2014
Publisher: © Elsevier Inc.
Citation: LI, H., LIU, H. and SIGANOS, A., 2014. A comparison of the stock market reactions of convertible bond offerings between financial and non-financial institutions: do they differ?. International Review of Financial Analysis. Available online 24 June 2014, doi:10.1016/j.irfa.2014.06.004
Abstract: We focus on the stock price reaction to convertible bond offering made by financial institutions and find that the cumulative abnormal return over the three day interval around convertible bond issuance is 1.41 percentage higher than that for non-financial institutions. This result supports our hypothesis that since financials are heavily regulated, the market is less likely to assume that the issuance of convertible bond by financials signals information that are overvalued. Our results remain robust after controlling for a number of firm-, issue-, and marketspecific characteristics as well as the level of short selling pressure induced by convertible bond arbitrageurs.
Description: Closed access
Version: Published
DOI: 10.1016/j.irfa.2014.06.004
URI: https://dspace.lboro.ac.uk/2134/20176
Publisher Link: http://dx.doi.org/10.1016/j.irfa.2014.06.004
ISSN: 1057-5219
Appears in Collections:Closed Access (Business School)

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