Does the Japanese stock market react differently to public security offering announcements than the US stock market?

We examine the equity valuation effects of common stock, straight debt, warrant bond and convertible bond offerings by Japanese firms during the period 1984–1991. We find that Japanese stock market reactions to announcements of common stock, straight debt and warrant bond offerings are quite similar...

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Bibliographic Details
Published inJapan and the world economy Vol. 8; no. 1; pp. 99 - 119
Main Authors Christensen, Donald G., Faria, Hugo J., Kwok, Chuck C.Y., Bremer, Marc
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.03.1996
North-Holland
Subjects
Announcement date
Bonds
Common stock
Comparative economics
Convertible bonds
Convertible debt
Debt
Economic conditions
Japan
Securities
Securities issues
Securities marketing
Stock exchange
Stock market
Stocks
Straight debt
United States
Valuation
Warrant bond
Warrant bond
Straight debt
Common stock
Convertible debt
Announcement date
G15
G14
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Summary:We examine the equity valuation effects of common stock, straight debt, warrant bond and convertible bond offerings by Japanese firms during the period 1984–1991. We find that Japanese stock market reactions to announcements of common stock, straight debt and warrant bond offerings are quite similar to those of the US market. The only inconsistency is in convertible bond offerings where we find insignificant abnormal returns. Our results provide some evidence that the underlying financial factors in both countries may be similar and strong enough to overcome the effect of environmental and institutional differences.
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ISSN:0922-1425
1879-2006
DOI:10.1016/0922-1425(95)00010-0