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The effects of bank regulation stringency on seasoned equity offering announcements

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journal contribution
posted on 06.02.2020, 09:18 by Hui Li, Hong Liu, Chris Veld
We study the relation between bank regulation stringency and announcement effects of seasoned equity offerings across 21 countries. Under a low to moderate bank regulation environment, the market reacts more positively to the bank SEO announcements for an increase in the level of bank regulation. However, the bank SEO announcement effects become more negative if the bank regulation becomes too stringent. This inverted U-shaped relation is robust after we use the exogenous cross-country and cross-year variation in the timing of the Basel II adoption as an instrument to assess the causal impact of bank regulation on SEO announcement effects. Bank regulation has no significant impact of SEO announcement effects if the equity offering is involuntary.

History

School

  • Business and Economics

Department

  • Business

Published in

Journal of International Money and Finance

Volume

91

Pages

71 - 85

Publisher

Elsevier BV

Version

AM (Accepted Manuscript)

Rights holder

© Elsevier Ltd

Publisher statement

This paper was accepted for publication in the journal Journal of International Money and Finance and the definitive published version is available at https://doi.org/10.1016/j.jimonfin.2018.11.001.

Publication date

2018-11-03

Copyright date

2018

ISSN

0261-5606

Language

en

Depositor

Prof Hong Liu. Deposit date: 4 February 2020

Exports

Loughborough Publications

Categories

Exports