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Convertible bond announcement effects: why is Japan different?

journal contribution
posted on 11.05.2016, 15:20 by Marie Dutordoir, Hui Li, Frank Hong Liu, Patrick Verwijmeren
U.S. and Japanese firms dominate global convertible bond issuance. Previous research documents more favorable convertible bond announcement effects in Japan than in the U.S. and other developed countries. Using a global sample of convertible bonds issued from 1982 to 2012, we find that the more favorable announcement effects of Japanese convertibles are driven by their stated uses of proceeds. Japanese convertibles more often include capital expenditure as an intended use, while U.S. firms tend to mention general purposes to motivate their offering. Our findings illustrate the value to firms of being more explicit when disclosing the intended use of proceeds of security offerings.

History

School

  • Business and Economics

Department

  • Business

Published in

Journal of Corporate Finance

Volume

37

Pages

76 - 92

Citation

DUTORDOIR, M. ... et al, 2016. Convertible bond announcement effects: why is Japan different? Journal of Corporate Finance, 37, pp. 76 - 92

Publisher

© Elsevier

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/

Acceptance date

10/12/2015

Publication date

2015-12-22

Notes

This paper is closed access.

ISSN

0929-1199

Language

en

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