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Information Asymmetry and Equity Issues


  • Dierkens, Nathalie


The paper examines the relevance of information asymmetry between the managers of the firm and the market for the equity issue process. It uses four proxies for information asymmetry and presents three groups of tests: cross-sectional regressions of the reaction at equity issue announcements, comparisons of information asymmetry before and after the announcements, and analyses of the timing behavior observed during the equity issue process. The results show that information asymmetry is a significant variable for equity issues.

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  • Dierkens, Nathalie, 1991. "Information Asymmetry and Equity Issues," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 26(02), pages 181-199, June.
  • Handle: RePEc:cup:jfinqa:v:26:y:1991:i:02:p:181-199_00

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    References listed on IDEAS

    1. Shleifer, Andrei & Vishny, Robert W, 1986. "Large Shareholders and Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 461-488, June.
    2. Harris, Milton & Raviv, Artur, 1988. "Corporate control contests and capital structure," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 55-86, January.
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