Controlling shareholders and market timing in share issuance

F. Urzua Infante, B. Larrain

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We examine market timing in the equity issuance of firms controlled by large shareholders using a hand-collected data set of controlling shareholders' ownership stakes in Chile between 1990 and 2009. When a firm issues shares, the controlling shareholder can either maintain or change his ownership stake depending on how many of the new shares he subscribes. Issuance predicts poor future returns and is preceded by high returns, but only when the controlling shareholder's stake is significantly reduced. Consistent with market timing, the results are stronger in the absence of institutional investors and in hot issuance markets.
Original languageEnglish
Pages (from-to)661-681
JournalJournal of Financial Economics
Volume109
Issue number3
DOIs
Publication statusPublished - 2013

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Market timing
Controlling shareholders
Ownership
Institutional investors
Chile
Large shareholders
Ownership change
Equity issuance

Cite this

Urzua Infante, F. ; Larrain, B. / Controlling shareholders and market timing in share issuance. In: Journal of Financial Economics. 2013 ; Vol. 109, No. 3. pp. 661-681.
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Controlling shareholders and market timing in share issuance. / Urzua Infante, F.; Larrain, B.

In: Journal of Financial Economics, Vol. 109, No. 3, 2013, p. 661-681.

Research output: Contribution to journalArticleScientificpeer-review

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