Valuation effects of commercial bank securities offerings. A test of the information hypothesis

John Polonchek, Myron B. Slovin, Marie Sushka

Research output: Contribution to journalArticle

42 Citations (Scopus)

Abstract

This paper provides event study evidence on securities issuance by commercial banks, a set of firms in which capital structure is regulated. The evidence supports the information hypothesis of securities issuance but also indicates that capital regulation interferes with information transfer. We find that: one, the negative impact of equity issues on bank stock prices is much weaker than for non-financial firms; two, the impact of securities issuance is uniformly less negative after the imposition of stricter capital requirements in 1981; and three, the impact of securities issuance is further attenuated after 1981 for non-multinational banks, which faced more specific capital requirements than multinational banks.

Original languageEnglish (US)
Pages (from-to)443-461
Number of pages19
JournalJournal of Banking and Finance
Volume13
Issue number3
DOIs
StatePublished - 1989

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Commercial banks
Security issuance
Valuation effects
Capital requirements
Multinational banks
Event study
Information transfer
Equity issues
Stock prices
Capital structure
Capital regulation

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance

Cite this

Valuation effects of commercial bank securities offerings. A test of the information hypothesis. / Polonchek, John; Slovin, Myron B.; Sushka, Marie.

In: Journal of Banking and Finance, Vol. 13, No. 3, 1989, p. 443-461.

Research output: Contribution to journalArticle

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