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Does liquidity risk explain low firm performance following seasoned equity offerings?

Bilinski, Pawel and Strong, Norman and Liu, Weimin (2011) Does liquidity risk explain low firm performance following seasoned equity offerings? Working Paper. UNSPECIFIED. (Unpublished)

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    Abstract

    By making seasoned equity offerings (SEO), firms can improve the liquidity of their shares and lower their costs of capital. This paper examines whether SEO firms achieve such a liquidity gain and explores the role of liquidity risk in explaining their long-run performance. Consistent with predictions, SEO firms experience significant post-issue improvements in liquidity and reductions in liquidity risk. Size and book-to-market matching fails to control for these liquidity effects, generating the low long-term post-SEO performance documented in the literature. SEO firms show normal long-term performance after adjusting for liquidity risk.

    Item Type: Monograph (Working Paper)
    Subjects: H Social Sciences > HG Finance
    Departments: Lancaster University Management School > Accounting & Finance
    ID Code: 53452
    Deposited By: ep_importer_pure
    Deposited On: 04 Apr 2012 11:34
    Refereed?: No
    Published?: Unpublished
    Last Modified: 10 Apr 2014 02:42
    Identification Number:
    URI: http://eprints.lancs.ac.uk/id/eprint/53452

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