Does shareholder coordination matter? Evidence from private placements

• 成果类型: Article
• 署名作者: Chakraborty, Indraneel; Gantchev, Nickolay
• 署名单位: Southern Methodist University; University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2012.10.001
• 发表日期: 2013
• 页码: 213-230
• 关键词: Private placements; Equity issuance; Shareholder coordination; Debt renegotiation; Firm distress

摘要

We propose a new role for private investments in public equity (PIPEs) as a mechanism to reduce coordination frictions among existing equity holders. We establish a causal link between the coordination ability of incumbent shareholders and PIPE issuance. This result obtains even after controlling for alternative explanations such as information asymmetry and access to public markets. Improved equity coordination following a private placement leads to favorable debt renegotiations within one year of issuance. Mitigating coordination frictions among shareholders ultimately decreases the odds of firm default in half. (C) 2012 Elsevier B.V. All rights reserved.