posted on 2016-07-21, 15:21authored byHui Li, Hong Liu, Antonios Siganos, Mingming Zhou
This paper studies the differences in the announcement effects of seasoned equity offerings (SEOs) of commercial banks and non-banks, and explores the influence of bank regulation and the financial crisis on such differences. We find that abnormal stock returns on SEO announcements for US commercial banks are significantly higher than those of non-banks, consistent with the hypothesis that bank regulations reduce the likelihood that bank SEOs signal overpriced equity. The propensity score matching-based difference-in-difference analysis indicates that the differences in stock returns between banks and non-banks decreased during the 2007–2009 financial crisis period and increased after the passage of the Dodd-Frank Act in 2010.
History
School
Business and Economics
Department
Business
Published in
Journal of Financial Stability
Volume
25
Pages
37 - 46 (9)
Citation
LI, H. ... et al, 2016. Bank regulation, financial crisis and the announcement effects of seasoned equity offerings of US commercial banks. Journal of Financial Stability, 25, pp. 37 - 46.
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
2016-06-16
Publication date
2016
Notes
This paper was accepted for publication in the journal Journal of Financial Stability and the definitive published version is available at http://dx.doi.org/10.1016/j.jfs.2016.06.007