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

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
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.date.lastModified
2017-12-14T09:03:51Z
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
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.googlescholar.linkpresent
yes
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

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