Global equity offerings and access to domestic loan market: U.S. evidence |
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Affiliation: | 1. Fordham University, United States; Bank of Finland, Finland; and University of Sydney, Australia;2. Department of Banking, Insurance and Risk, Kozminski University, Jagiellonska 59, 03-301 Warsaw, Poland;3. National Bank of Poland, Poland;4. IESEG School of Management, Paris, France;5. LEM-CNRS 9221, Lille, France |
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Abstract: | This study examines whether and to what extend global equity offerings at the IPO stage may affect issuing firms' ability to borrow in the domestic debt market. Tracking bank loans taken by U.S. IPO firms in the domestic syndicated loan market, we observe that global equity offering firms experience more favorable loan price than that offered to their domestic counterparts. This finding holds for a set of robustness tests of endogeneity issues. We also find that, compared with their domestic counterparts, global equity offering firms are less likely to have financial distress, engage more in international diversification, and are more likely to wait a longer time to apply for syndicated loans. |
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