TitleLong-Horizon Seasoned Equity Performance in the Pacific Rim Financial Markets
Publication TypeJournal Articles
Year of Publication2002
AuthorsMathew, P
JournalReview of Financial Economics
Volume11
Issue4
Pagination317-333
Date Published2002
KeywordsFinance
Abstract

Previous studies of firms that issue seasoned equity in the US and Japan have found that these firms significantly underperform over the long-run subsequent to the issue. I offer further evidence of this by examining Japanese seasoned offerings (SEOs) from 1975 to 1992. I find similar results for firms issuing seasoned equity in Hong Kong. However, I also find that Korean SEOs generate insignificant abnormal returns over a 36-month period following the issue. These results suggest that the asymmetric information argument offered for the US and Japanese markets do not always hold, especially in markets where the regulatory and market structures vary greatly. Cross-sectional results suggest that younger firms tend to perform worse than older firms.
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