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Equity Raising by Asian Firms: Choosing Between PIPEs and SEOs

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dc.contributor.authorDahiya, Sandeep
dc.contributor.authorKlapper, Leora
dc.contributor.authorParthasarathy, Harini
dc.contributor.authorSinger, Dorothe
dc.date.accessioned2018-02-06T16:04:44Z
dc.date.available2018-02-06T16:04:44Z
dc.date.issued2017-08
dc.description.abstractWhy do some firms raise equity capital from a small number of “private” investors (e.g. Private Investment in Public Equities–PIPE), while other firms do so from a large number of small investors (e.g. Seasoned Equity Offering–SEO)? Recent studies list market timing, asymmetric information, and financial distress as the primary motives that drive the choice of equity raising mechanism. However, these results are based exclusively on the experience of US-based firms. This study examines 456 PIPE and 1910 SEO transactions of firms based in nine Asian countries to assess if the results reported for the US-based issuers are applicable to a wider set of firms. While market timing continues to be a significant driver of how firms choose between PIPE and SEO, unlike the US issuers, there is little evidence that Asian firms in our sample make this choice based on either asymmetric information or financial distress. As with the US firms, private investment provides significant certification for PIPE issuers. Finally, we find that both the operating performance as well as the stock price returns show little improvement for both PIPE as well as SEO issuers. Moreover, the difference between performance change of PIPE issuers is statistically indistinguishable from that of SEO issuers. This implies that PIPE investors do not provide meaningful benefits to the firms they invest in. Overall, our findings suggest that determinants for choosing specific equity issuance mechanism for international firms do not overlap completely with those for US-based firms.en
dc.identifier.citationJournal of Corporate Finance
dc.identifier.doi10.1596/29321
dc.identifier.issn0929-1199
dc.identifier.urihttps://hdl.handle.net/10986/29321
dc.publisherElsevier
dc.rightsCC BY-NC-ND 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/igo
dc.subjectEQUITY CAPITAL
dc.subjectEQUITY RAISING
dc.subjectSTOCK OFFERING
dc.subjectINSTITUTIONAL INVESTORS
dc.titleEquity Raising by Asian Firmsen
dc.title.subtitleChoosing Between PIPEs and SEOsen
dc.typeJournal Articleen
dc.typeArticle de journalfr
dc.typeArtículo de revistaes
dspace.entity.typePublication
okr.associatedcontenthttps://www.sciencedirect.com/science/article/pii/S0929119917302067 Journal website (version of record)en
okr.crossref.titleEquity Raising by Asian Firms: Choosing Between PIPEs and SEOs
okr.date.disclosure2019-04-19
okr.date.doiregistration2025-04-07T08:33:37.002924Z
okr.date.doiregistration2025-04-08T16:15:55.142953Z
okr.date.doiregistration2025-04-09T02:47:58.566959Z
okr.doctypePublications & Research::Journal Article
okr.doctypePublications & Research
okr.externalcontentExternal Content
okr.identifier.doi10.1016/j.jcorpfin.2017.04.009
okr.identifier.doi10.1596/29321
okr.identifier.report125240
okr.journal.nbpages64-83
okr.language.supporteden
okr.peerreviewAcademic Peer Review
okr.region.countryAustralia
okr.region.countryChina
okr.region.countryChina, Hong Kong SAR
okr.region.countryIndia
okr.region.countryJapan
okr.region.countryKorea, Republic of
okr.region.countrySingapore
okr.region.countryTaiwan, China
okr.region.countryThailand
okr.region.geographicalAsia
okr.topicPrivate Sector Development::Private Sector Economics
okr.topicFinance and Financial Sector Development::Capital Markets and Capital Flows
okr.unitDECFP
okr.volume45
relation.isAuthorOfPublicatione0a9502f-8574-53b5-bf27-732f5a6026e2
relation.isAuthorOfPublication7d5093ed-b084-426c-80af-dda30c51d6d4
relation.isAuthorOfPublication.latestForDiscoverye0a9502f-8574-53b5-bf27-732f5a6026e2
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