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Effects of market timing on primary share issues in the Brazilian capital market

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  • Gomes, Matheus da Costa
  • Magnani, Vinícius Medeiros
  • Albanez, Tatiana
  • Valle, Mauricio Ribeiro do

Abstract

This paper analyzes the occurrence of market timing and its effects on primary share issues (IPOs and SEOs) of 123 Brazilian firms in the 2004–2015 period, by investigating the relation between the cumulative abnormal returns and amount of proceeds raised. We use cumulative abnormal returns, before and after the share issue, as a proxy for equity market timing. The results indicate the existence of market timing in the decision to issue shares in the Brazilian capital market, reflected in the abnormal returns, resulting in obtaining a larger volume of resources by the companies practicing this behavior.

Suggested Citation

  • Gomes, Matheus da Costa & Magnani, Vinícius Medeiros & Albanez, Tatiana & Valle, Mauricio Ribeiro do, 2019. "Effects of market timing on primary share issues in the Brazilian capital market," The North American Journal of Economics and Finance, Elsevier, vol. 49(C), pages 361-377.
    • Handle: RePEc:eee:ecofin:v:49:y:2019:i:c:p:361-377
    DOI: 10.1016/j.najef.2019.03.022
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    More about this item

    Keywords

    Capital structure; Financing decisions; Equity market timing; Windows of opportunity; Brazilian capital market;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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