Intra-Industry Effects of Corporate Security Withdrawals

• Main Author: 黃嘉威
• Other Authors: 陳聖賢
• Format: Others
• Language: en_US
• Published: 2002
• Online Access: http://ndltd.ncl.edu.tw/handle/64530662113336044172

碩士 === 元智大學 === 財務金融研究所 === 90 === A procedure is in this study investigates the effect of withdrawal announcements of corporate security offerings on the stock price of rival firms. On average, although firms announcing withdrawal offering experience a significantly positive stock price reaction for common stock and convertible debt, portfolios of rival firms in the same industry experience a significant and contemporaneous positive stock price reaction, but convertible debt is not significant. However, the withdrawal announcement of straight debt offering is negative stock price reaction for announcer and its industry rival firms will react negatively as well. The result supports that the contagion effect dominates the competitive effect. In addition, I also examined the IPOs (Initial Public Offerings) effect of rivals when it is announced withdrawal; the result indicated that the average abnormal return is positive and significant. The cross-sectional analysis indicate that the Announcers’ CAR is significantly positive correlation with their rivals’ CAR. In addition, the Herfindahl Index is positive and statistically significant and the dummy variable of withdrawal reasons is negative and statistically significant for common stock offering and combine common stock with convertible debt offerings. Specifically, Industry Growth Rate and Degree of Similarity are positive and statistically significant for combing common stock with convertible debt offerings samples.