Ownership structure and post-issue operating performance of firms conducting seasoned equity offerings in Thailand |
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Authors: | Piman Limpaphayom Anchalee Ngamwutikul |
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Institution: | (1) Sasin Graduate Institute of Business Administration, Chulalongkorn University, Chula 12, Phyathai Road, 10330 Bangkok, Thailand;(2) Ayudhaya JF Asset Management Limited, 10330 Bangkok, Thailand |
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Abstract: | This paper investigates the post-issue operating performance of companies that conducted seasoned equity offerings (SEO) in
the Stock Exchange of Thailand (SET) during the period 1991 to 1994. It is documented that SEO firms exhibited declining operating
performance after the offering. Further, there is a negative relation between inside ownership concentration and postissue
operating performance decline. In support of the signaling effect, the ratio of issue proceeds to pre-issue equity also negatively
relates to post-issue operating performance. Further, the negative relation between issue proceeds and operating performance
decline is intensified among SEO firms with high insider ownership concentration. The finding offers evidence in support of
agency conflicts and information asymmetry and suggests that the two factors are operating simultaneously. |
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