Seasoned equity offerings and customer–supplier relationships |
| |
| Institution: | 1. Sawyer Business School, Suffolk University, Boston, MA 02108, United States;2. Division of Banking and Finance, Nanyang Business School, Nanyang Technological University, 639798, Singapore;3. Australian School of Business, University of New South Wales, Sydney, NSW 2052, Australia;4. Sogang Business School, Sogang University, Seoul, 121-742, South Korea;1. Columbia Business School, USA;1. Deutsche Bundesbank, Wilhelm-Epstein-Str. 14, 60431 Frankfurt am Main, Germany;2. SAFE, GSEFM, Goethe University Frankfurt, Frankfurt am Main, Germany;1. Board of Governors of the Federal Reserve, 20th Street and Constitution Avenue, Washington D.C. 20551, United States;2. Federal Reserve Bank of St. Louis, P.O. Box 442, St. Louis, MO 63166-0442, United States;3. Bank for International Settlements, Centralbahnplatz 2, 4051 Basel, Switzerland |
| |
| Abstract: | We investigate how seasoned equity offerings (SEOs) by issuers with large customers affect both trading partners’ market values and the relationship's health. We hypothesize that SEOs reveal adverse information about an issuer's major customers and find that issuers and their large customers experience negative returns on SEO announcements. These results are more pronounced when customers have higher levels of information asymmetry and when customer-supplier relationships are particularly important. Large customers of issuers experience larger declines in post-SEO sales, operating performance, and credit ratings than large customers of non-issuers. Also, SEO issuer sales to large customers and relationship duration significantly decline. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
