Conglomerate Structure and Capital Market Timing
Financial Management, Forthcoming
53 Pages Posted: 15 Dec 2009 Last revised: 29 Aug 2013
Date Written: September 24, 2010
Abstract
We examine the effects of keiretsu structure on capital market timing. Keiretsu groups offer a hybrid structure between fully integrated conglomerates and stand alone firms. We find that past market conditions affect the capital structure of keiretsu firms more than they affect the capital structure of unaffiliated firms. The decision to issue equity is more correlated with market conditions for keiretsu members than it is for unaffiliated firms. The stock returns of keiretsu firms following the issuance of equity decrease with the size of the issuance. These results suggest that keiretsu members time the issuance of equity more so than stand alone firms.
Keywords: Conglomerates, Keiretsu, Capital Structure, Market Timing, Japanese Markets, Japanese Firms
JEL Classification: G31, G32, G21
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Political Rights and the Cost of Debt
By Yaxuan Qi, John K. Wald, ...
-
Property Rights Protection, Corporate Transparency, and Growth
By Art Durnev, Vihang R. Errunza, ...
-
Property Rights Protection, Corporate Transparency, and Growth
By Art Durnev, Vihang R. Errunza, ...
-
Is Political Risk Company-Specific? The Market Side of the Yukos Affair
By Alexei Goriaev and Konstantin Sonin
-
How Legal Environments Affect the Use of Bond Covenants
By Yaxuan Qi, Lukas Roth, ...
-
Expropriation Risk and Firm Growth: A Corporate Transparency Channel
By Art Durnev and Sergei Guriev
-
Expropriation Risk and Firm Growth: A Corporate Transparency Channel
By Art Durnev and Sergei Guriev
-
The Resource Curse: A Corporate Transparency Channel
By Art Durnev and Sergei Guriev
-
The Dynamic Volume-Return Relationship of Individual Stocks: The International Evidence
By Louis Gagnon, George Andrew Karolyi, ...