Dinger, V and Vallascas, F (2016) Do Banks Issue Equity When They Are Poorly Capitalized? Journal of Financial and Quantitative Analysis, 51 (5). pp. 1575-1609. ISSN 0022-1090
Abstract
Debt overhang and moral hazard predict that poorly capitalized banks have a lower likelihood to issue equity, while the presence of regulatory and market pressures posits an opposite theoretical prediction. By using an international sample of bank seasoned equity offerings (SEOs), we show that the likelihood of issuing SEOs is higher in poorly capitalized banks and that such banks prefer SEOs to alternative capitalization strategies. A series of tests exploring the variation of capital regulation and market discipline show that market mechanisms rather than capital regulation are the primary driver of the decision to issue by poorly capitalized banks.
Metadata
Item Type: | Article |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | © Michael G. Foster School of Business, University of Washington 2016. This is an author produced version of a paper published in Journal of Financial and Quantitative Analysis . Uploaded in accordance with the publisher's self-archiving policy. |
Dates: |
|
Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 23 Sep 2016 10:39 |
Last Modified: | 28 Aug 2020 10:57 |
Published Version: | https://doi.org/10.1017/S0022109016000545 |
Status: | Published |
Publisher: | Cambridge University Press |
Identification Number: | 10.1017/S0022109016000545 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:97748 |