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A comparison of the stock market reactions of convertible bond offerings between financial and non-financial institutions: do they differ?
journal contribution
posted on 2016-01-29, 09:57 authored by Hui Li, Hong Liu, Antonios SiganosWe 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.
History
School
- Business and Economics
Department
- Business
Published in
International Review of Financial AnalysisCitation
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.2014.06.004Publisher
© Elsevier Inc.Version
- VoR (Version of Record)
Publisher statement
This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/Publication date
2014Notes
Closed accessISSN
1057-5219Publisher version
Language
- en