Why underwrite rights offerings? Some new evidence

• 成果类型: Article
• 署名作者: Bohren, O; Eckbo, BE; Michalsen, D
• 署名单位: Stockholm School of Economics; BI Norwegian Business School; Norwegian School of Economics (NHH)
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(97)00030-5
• 发表日期: 1997
• 页码: 223-261
• 关键词: RIGHTS; Underwriting; shareholder-subscription; issue-costs; adverse-selection

摘要

We examine rights issues on the Oslo Stock Exchange, where seasoned public offerings now take place almost exclusively through use of the relatively expensive standby underwriting method rather than unsinsured rights. We show that the propensity to use standby underwriting increases as expected shareholder takeup decreases, that the market reaction to uninsured rights offers is significantly positive, and that standbys elicit the least favorable market reaction to the public issue announcement. These and other cross-sectional results are consistent with the asymmetric information framework of Eckbo and Masulis (1992) and help resolve the longstanding rights offer paradox.