NDLI: Competitors’ stock price reactions in response to private equity placements: evidence from a transitional economy*

Content Provider	Taylor & Francis Online
Author	Fonseka, M. M. Rajapakse, R. L. Theja N. Tian, Gao-Liang
Abstract	This paper examines whether information conveyed by private equity placement decisions transfers to non-applying companies within the same industry. In particular, it investigates the impact of a company’s announcements of the application for, withdrawal, rejection, approval and completion of private equity placement, while examining the cross-sectional differences of the market performance of their industry counterparts, both in the short- and long-term. It was found that an intra-industry reaction exists; competitors experience a decrease in stock prices in response to the announcement of the application for, approval and completion of private equity placement and an increase in stock prices around the announcement of the withdrawal or rejection of applications. Further, it was found that competitors experience a decrease in their long-term stock performance following private placements. A higher discount on private equity placement is detrimental for private equity (P.E.) issuing companies in the long-term. This study, therefore, provides evidence of the existence of a contagion effect in the long-term while a competitive effect dominates in the short-term.
Starting Page	550
Ending Page	575
Page Count	26
File Format	PDF HTM / HTML
ISSN	1331677X 18489664
DOI	10.1080/1331677X.2018.1429293
Journal	Economic Research-Ekonomska Istraživanja
Volume Number	31
Issue Number	1
Language	English
Publisher	Routledge
Publisher Date	2018-03-05
Access Restriction	Open
Subject Keyword	Announcement effect China Competitive effects Contagion effects Competitor firms Private equity placement regulations G10 G20 G32 G38
Alternative Title	Competitors’ stock price reactions in response to private equity placements: evidence from a transitional economy
Content Type	Text
Resource Type	Article
Subject	Economics and Econometrics

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in

Competitive Dan Contagion Effects Dalam Transfer Informasi Intra Industri Terhadap Pengumuman Stock Split

Contagion and competitive intra-industry effects of bankruptcy announcements (1990).

Pricing and performance of IPOs: Evidence from Indian stock market

ARE PRIVATE EQUITY INVESTORS GOVERNANCE CHAMPIONS OR SIMPLY STOCK PICKING SPECIALISTS? #

The Long Run Share Price Performance of Malaysian Firms Issuing Equity Private Placements

Review of research on private placements of equity and assets-injecting

The Long Run Share Price Performance of Malaysian Firms Issuing Equity Private Placements

Understanding the Positive Announcement Effects of Private Equity Placements: New Insights from Hong Kong Data

1 Positive Performance and Private Equity Placements: Outside Monitoring or Inside Expertise?

Competitors’ stock price reactions in response to private equity placements: evidence from a transitional economy*

Similar Documents

Competitive Dan Contagion Effects Dalam Transfer Informasi Intra Industri Terhadap Pengumuman Stock Split

Contagion and competitive intra-industry effects of bankruptcy announcements (1990).

Pricing and performance of IPOs: Evidence from Indian stock market

ARE PRIVATE EQUITY INVESTORS GOVERNANCE CHAMPIONS OR SIMPLY STOCK PICKING SPECIALISTS? #

The Long Run Share Price Performance of Malaysian Firms Issuing Equity Private Placements

Review of research on private placements of equity and assets-injecting

The Long Run Share Price Performance of Malaysian Firms Issuing Equity Private Placements

Understanding the Positive Announcement Effects of Private Equity Placements: New Insights from Hong Kong Data

1 Positive Performance and Private Equity Placements: Outside Monitoring or Inside Expertise?

Competitors’ stock price reactions in response to private equity placements: evidence from a transitional economy*