Financial constraints, Corporate governance, and SEO performance

• Main Authors: Wei,Tzuyin, 魏慈吟
• Other Authors: Chan,Chiachung
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/54930132802881750998

碩士 === 東海大學 === 財務金融學系 === 99 === Several recent studies document that seasoned equity issuers experience poor long-run stock performance compared to matched non-issuers. If the firm is financially constrained, and there is no other way to use the proceeds for investment purposes, the only way is to issue the equity. We could infer that these issuers with specific plans to use the proceeds for investment purposes are signaling profitable investment opportunities. The purpose of this paper is to compare the influence of financial constraint and corporate governance on post-SEO performance of publicly traded Taiwan firms in the 1997-2006 periods. First, we find that post-SEO performance of financially constrained firms with poor corporate governance is worse because of the agency problems. Another, the post-SEO performance of financially constrained firms with good corporate governance is better. We find little significant evidence of underperformance that firms with financial unconstrained regardless of their corporate governance. Further, our results indicate that firms with financially constrained and good corporate governance really manage the accruals to increase booking value of firms to attract the investors and convey the good news, so that the post-SEO performance is better.