Informational Externalities Of Bank Initial Public Offerings
- Topics:
- IPO
- Tags:
- Bank,
- Finance,
- Financial Planning,
- Financial Services,
- Investment,
- IPO,
- Reaction,
- Region,
- University Of New Orleans
- Source:
- University of New Orleans
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Overview: This paper examines IPO (Initial Public Offerings) announcements by banks covering a period from 1983 to 2000 to see which of the two views holds. It was found that, in general, such announcements produce statistically significant wealth effects for rival banks in the same state or region. However, regional differences exist in the size and direction of rival reactions. Positive and significant reactions are present in two regions: Mid-Atlantic and Southwest region, while negative and significant reaction is present in Midwest region. The variation in individual rival's reaction is explained both by rival-specific and event-specific characteristics. Finally, the evidence suggests that the higher the amount of IPO proceeds, the greater the information content.
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Format: PDF | Size: 213KB | Date: Dec 2004 | Pages: 31
