Publication:
The Role of Private Equity Investments in Public Firms : International Evidence

dc.contributor.author Dahiya, Sandeep
dc.contributor.author Klapper, Leora
dc.contributor.author Parthasarathy, Harini
dc.contributor.author Singer, Dorothe
dc.date.accessioned 2015-02-23T21:35:16Z
dc.date.available 2015-02-23T21:35:16Z
dc.date.issued 2013-06
dc.description.abstract This paper compares the raising of external equity capital from private equity investors via private investments in public equity (PIPEs) and seasoned equity offerings (SEOs) using a sample of 456 PIPEs and 1,910 SEOs drawn from nine Asian countries. Consistent with the idea that insiders attempt to time the markets, firms issuing SEOs are preceded by a significantly higher run-up in stock price compared with those issuing PIPEs. This result is consistent with the undervaluation hypothesis that states that firms are more likely to issue PIPEs when they perceive their stock to be undervalued. In contrast to the United States where this undervaluation appears to be driven by financial distress and asymmetric information, the results show PIPE and SEO issuers to be statistically undistinguishable from each other. The announcement of a PIPE offering is on average associated with a significantly higher stock market reaction compared with an issue of a SEO, suggesting that private equity investors may play a certification or monitoring role. However, a comparison of PIPE issuers' operating performance and stock market returns in the pre-issue and the post-issue periods does not detect any significant improvements. en
dc.identifier http://documents.worldbank.org/curated/en/2013/06/17857660/role-private-equity-investments-public-firms-international-evidence
dc.identifier.uri http://hdl.handle.net/10986/21476
dc.language English
dc.language.iso en_US
dc.publisher World Bank, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper;No. 6484
dc.rights CC BY 3.0 IGO
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo/
dc.subject ACCOUNTING
dc.subject AFFILIATED ORGANIZATIONS
dc.subject AGENCY PROBLEMS
dc.subject ALTERNATIVE FUNDING
dc.subject AMOUNT OF CAPITAL
dc.subject ANNUAL SALES
dc.subject ASSET RATIO
dc.subject ASSET VALUE
dc.subject ASYMMETRIC INFORMATION
dc.subject BALANCE SHEET
dc.subject BALANCE SHEET INFORMATION
dc.subject BENCHMARK
dc.subject BOOK VALUE
dc.subject CAPITAL FUNDS
dc.subject CAPITAL STRUCTURE
dc.subject CORPORATE FINANCE
dc.subject CORPORATE GOVERNANCE
dc.subject COUNTRY DUMMY
dc.subject COUNTRY FIXED EFFECTS
dc.subject CURRENCY
dc.subject DEBT
dc.subject DEBT-EQUITY
dc.subject DEVELOPING COUNTRIES
dc.subject DEVELOPMENT INTENSITY
dc.subject DEVELOPMENT POLICY
dc.subject DUMMY VARIABLE
dc.subject DUMMY VARIABLES
dc.subject EMERGING MARKETS
dc.subject EQUIPMENT
dc.subject EQUITIES
dc.subject EQUITY CAPITAL
dc.subject EQUITY FINANCING
dc.subject EQUITY FINANCINGS
dc.subject EQUITY HOLDERS
dc.subject EQUITY INVESTMENTS
dc.subject EQUITY ISSUANCE
dc.subject EQUITY ISSUE
dc.subject EQUITY ISSUES
dc.subject EQUITY STAKES
dc.subject EXCESS RETURN
dc.subject FINANCIAL COMPANIES
dc.subject FINANCIAL CRISIS
dc.subject FINANCIAL DISTRESS
dc.subject FINANCIAL ENGINEERING
dc.subject FINANCIAL HEALTH
dc.subject FINANCIAL STRESS
dc.subject FINANCIAL STUDIES
dc.subject FIRM PERFORMANCE
dc.subject FUND MANAGERS
dc.subject FUTURE PROSPECTS
dc.subject GROUP OF INVESTORS
dc.subject HEDGE FUND
dc.subject HEDGE FUND INVESTORS
dc.subject HEDGE FUNDS
dc.subject HOLDING
dc.subject HOME MARKET
dc.subject IMPLICIT SUPPORT
dc.subject INCOME
dc.subject INFORMATION ASYMMETRY
dc.subject INITIAL PUBLIC OFFERINGS
dc.subject INSTITUTIONAL INVESTORS
dc.subject INSURANCE
dc.subject INSURANCE COMPANIES
dc.subject INTERNATIONAL BANK
dc.subject INTERNATIONAL DEVELOPMENT
dc.subject INTERNATIONAL MARKETS
dc.subject INVESTING
dc.subject INVESTMENT AMOUNT
dc.subject INVESTMENT BANKING
dc.subject INVESTMENT DECISIONS
dc.subject INVESTMENT OPPORTUNITIES
dc.subject INVESTMENT PROFESSIONALS
dc.subject INVESTMENT STRATEGY
dc.subject INVESTMENT VEHICLES
dc.subject INVESTOR BASE
dc.subject IPO
dc.subject ISSUANCE
dc.subject ISSUANCES
dc.subject LACK OF CREDIBILITY
dc.subject LIMITED LIABILITY
dc.subject LIMITED LIABILITY CORPORATION
dc.subject LIQUID MARKET
dc.subject LIQUIDITY
dc.subject LLC
dc.subject MARKET CAPITALIZATION
dc.subject MARKET DISCOUNTS
dc.subject MARKET MICROSTRUCTURE
dc.subject MARKET PERFORMANCE
dc.subject MARKET RETURN
dc.subject MARKET RETURNS
dc.subject MARKET STOCK
dc.subject MERGERS
dc.subject OFFER PRICE
dc.subject OWNERSHIP CONCENTRATION
dc.subject PENSION
dc.subject PENSION FUNDS
dc.subject PERFORMANCE DATA
dc.subject PORTFOLIO
dc.subject POTENTIAL INVESTORS
dc.subject PRICE INCREASE
dc.subject PRIVATE EQUITY
dc.subject PRIVATE EQUITY INVESTORS
dc.subject PRIVATE INVESTMENT
dc.subject PRIVATE INVESTMENTS
dc.subject PRIVATE INVESTORS
dc.subject PRIVATE PLACEMENT
dc.subject PRIVATE PLACEMENTS
dc.subject PRIVATE SECTOR DEVELOPMENT
dc.subject PROFITABILITY
dc.subject PUBLIC COMPANIES
dc.subject PUBLIC COMPANY
dc.subject PUBLIC EQUITIES
dc.subject PUBLIC EQUITY
dc.subject PUBLIC MARKET
dc.subject PUBLIC MARKETS
dc.subject PUBLIC REGISTRATION
dc.subject REAL ESTATE
dc.subject REGISTRATION PROCESS
dc.subject RESTRICTED SHARES
dc.subject RETAIL
dc.subject RETAIL INVESTORS
dc.subject RETURN ON ASSETS
dc.subject ROA
dc.subject SALES
dc.subject SECURITIES
dc.subject SECURITIES ISSUANCE
dc.subject SHARE OF EQUITY
dc.subject SHARE PRICE
dc.subject SHAREHOLDER
dc.subject SHAREHOLDERS
dc.subject SHARES OUTSTANDING
dc.subject STOCK EXCHANGES
dc.subject STOCK INDEX
dc.subject STOCK MARKET
dc.subject STOCK MARKET MOVEMENTS
dc.subject STOCK MARKETS
dc.subject STOCK PRICE
dc.subject STOCK PRICES
dc.subject STOCK RETURN
dc.subject STOCK RETURNS
dc.subject STOCKS
dc.subject STRATEGIC INVESTOR
dc.subject TANGIBLE ASSETS
dc.subject TAX
dc.subject TELECOMMUNICATIONS
dc.subject TOTAL DEBT
dc.subject TRADING
dc.subject TRADING VOLUME
dc.subject TRANCHE
dc.subject TRANCHES
dc.subject TRANSACTION
dc.subject UNDERVALUATION
dc.subject UNDERWRITER
dc.subject VALUE OF ASSETS
dc.subject VENTURE CAPITAL
dc.subject VENTURE CAPITAL FUNDS
dc.subject WEALTH
dc.title The Role of Private Equity Investments in Public Firms : International Evidence en
dspace.entity.type Publication
okr.crosscuttingsolutionarea Public-Private Partnerships
okr.date.disclosure 2013-06-13
okr.doctype Publications & Research
okr.doctype Publications & Research :: Policy Research Working Paper
okr.docurl http://documents.worldbank.org/curated/en/2013/06/17857660/role-private-equity-investments-public-firms-international-evidence
okr.globalpractice Finance and Markets
okr.identifier.doi 10.1596/1813-9450-6484
okr.identifier.externaldocumentum 000158349_20130613161707
okr.identifier.internaldocumentum 17857660
okr.identifier.report WPS6484
okr.language.supported en
okr.pdfurl http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/06/13/000158349_20130613161707/Rendered/PDF/WPS6484.pdf en
okr.topic Macroeconomics and Economic Growth :: Investment and Investment Climate
okr.topic Macroeconomics and Economic Growth :: Markets and Market Access
okr.topic Economic Theory and Research
okr.topic Private Sector Development :: Emerging Markets
okr.topic Finance and Financial Sector Development :: Debt Markets
okr.unit Finance and Private Sector Development Team, Development Research Group
relation.isAuthorOfPublication e0a9502f-8574-53b5-bf27-732f5a6026e2
relation.isSeriesOfPublication 26e071dc-b0bf-409c-b982-df2970295c87
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