Corporate financing decisions when investors take the path of least resistance:
"We explore the consequences for corporate financial policy that arise when investors exhibit inertial behavior. One implication of investor inertia is that, all else equal, a firm pursuing a strategy of equity-financed growth will prefer a stock-for-stock merger to greenfield investment financ...
Gespeichert in:
| Hauptverfasser: | , , |
|---|---|
| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Cambridge, Mass.
National Bureau of Economic Research
2004
|
| Schriftenreihe: | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series
10998 |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Zusammenfassung: | "We explore the consequences for corporate financial policy that arise when investors exhibit inertial behavior. One implication of investor inertia is that, all else equal, a firm pursuing a strategy of equity-financed growth will prefer a stock-for-stock merger to greenfield investment financed with an SEO. With a merger, acquirer stock is placed in the hands of investors, who, because of inertia, do not resell it all on the open market. If there is downward-sloping demand for acquirer shares, this leads to less price pressure than an SEO, and cheaper equity financing as a result. We develop a simple model to illustrate this idea, and present supporting empirical evidence. Both individual and institutional investors tend to hang on to shares granted them in mergers, with this tendency being much stronger for individuals. Consistent with the model and with this cross-sectional pattern in inertia, acquirers targeting firms with high institutional ownership experience more negative announcement effects and greater announcement volume. Moreover, the results are strongest when the overlap in target and acquirer institutional ownership is low and when the demand curve for the acquirer's shares appears to be steep"--National Bureau of Economic Research web site. |
| Beschreibung: | 49 S. graph. Darst. |
Internformat
MARC
| LEADER | 00000nam a2200000zcb4500 | ||
|---|---|---|---|
| 001 | BV023591167 | ||
| 003 | DE-604 | ||
| 005 | 20100210 | ||
| 007 | t | ||
| 008 | 050106s2004 xxud||| |||| 00||| eng d | ||
| 035 | |a (OCoLC)57424098 | ||
| 035 | |a (DE-599)BVBBV023591167 | ||
| 040 | |a DE-604 |b ger | ||
| 041 | 0 | |a eng | |
| 044 | |a xxu |c XD-US | ||
| 049 | |a DE-521 |a DE-19 | ||
| 050 | 0 | |a HB1 | |
| 100 | 1 | |a Baker, Malcolm |e Verfasser |0 (DE-588)128831480 |4 aut | |
| 245 | 1 | 0 | |a Corporate financing decisions when investors take the path of least resistance |c Malcolm Baker ; Joshua Coval ; Jeremy C. Stein |
| 264 | 1 | |a Cambridge, Mass. |b National Bureau of Economic Research |c 2004 | |
| 300 | |a 49 S. |b graph. Darst. | ||
| 336 | |b txt |2 rdacontent | ||
| 337 | |b n |2 rdamedia | ||
| 338 | |b nc |2 rdacarrier | ||
| 490 | 1 | |a National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |v 10998 | |
| 520 | 3 | |a "We explore the consequences for corporate financial policy that arise when investors exhibit inertial behavior. One implication of investor inertia is that, all else equal, a firm pursuing a strategy of equity-financed growth will prefer a stock-for-stock merger to greenfield investment financed with an SEO. With a merger, acquirer stock is placed in the hands of investors, who, because of inertia, do not resell it all on the open market. If there is downward-sloping demand for acquirer shares, this leads to less price pressure than an SEO, and cheaper equity financing as a result. We develop a simple model to illustrate this idea, and present supporting empirical evidence. Both individual and institutional investors tend to hang on to shares granted them in mergers, with this tendency being much stronger for individuals. Consistent with the model and with this cross-sectional pattern in inertia, acquirers targeting firms with high institutional ownership experience more negative announcement effects and greater announcement volume. Moreover, the results are strongest when the overlap in target and acquirer institutional ownership is low and when the demand curve for the acquirer's shares appears to be steep"--National Bureau of Economic Research web site. | |
| 650 | 4 | |a Ökonometrisches Modell | |
| 650 | 4 | |a Corporations |x Finance |x Econometric models | |
| 700 | 1 | |a Coval, Joshua |e Verfasser |0 (DE-588)129717711 |4 aut | |
| 700 | 1 | |a Stein, Jeremy C. |d 1960- |e Verfasser |0 (DE-588)124771726 |4 aut | |
| 776 | 0 | 8 | |i Erscheint auch als |n Online-Ausgabe |
| 830 | 0 | |a National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |v 10998 |w (DE-604)BV002801238 |9 10998 | |
| 856 | 4 | 1 | |u http://papers.nber.org/papers/w10998.pdf |z kostenfrei |3 Volltext |
| 999 | |a oai:aleph.bib-bvb.de:BVB01-016906497 | ||
Datensatz im Suchindex
| _version_ | 1804138248196325376 |
|---|---|
| adam_txt | |
| any_adam_object | |
| any_adam_object_boolean | |
| author | Baker, Malcolm Coval, Joshua Stein, Jeremy C. 1960- |
| author_GND | (DE-588)128831480 (DE-588)129717711 (DE-588)124771726 |
| author_facet | Baker, Malcolm Coval, Joshua Stein, Jeremy C. 1960- |
| author_role | aut aut aut |
| author_sort | Baker, Malcolm |
| author_variant | m b mb j c jc j c s jc jcs |
| building | Verbundindex |
| bvnumber | BV023591167 |
| callnumber-first | H - Social Science |
| callnumber-label | HB1 |
| callnumber-raw | HB1 |
| callnumber-search | HB1 |
| callnumber-sort | HB 11 |
| callnumber-subject | HB - Economic Theory and Demography |
| ctrlnum | (OCoLC)57424098 (DE-599)BVBBV023591167 |
| format | Book |
| fullrecord | <?xml version="1.0" encoding="UTF-8"?><collection xmlns="http://www.loc.gov/MARC21/slim"><record><leader>02730nam a2200373zcb4500</leader><controlfield tag="001">BV023591167</controlfield><controlfield tag="003">DE-604</controlfield><controlfield tag="005">20100210 </controlfield><controlfield tag="007">t</controlfield><controlfield tag="008">050106s2004 xxud||| |||| 00||| eng d</controlfield><datafield tag="035" ind1=" " ind2=" "><subfield code="a">(OCoLC)57424098</subfield></datafield><datafield tag="035" ind1=" " ind2=" "><subfield code="a">(DE-599)BVBBV023591167</subfield></datafield><datafield tag="040" ind1=" " ind2=" "><subfield code="a">DE-604</subfield><subfield code="b">ger</subfield></datafield><datafield tag="041" ind1="0" ind2=" "><subfield code="a">eng</subfield></datafield><datafield tag="044" ind1=" " ind2=" "><subfield code="a">xxu</subfield><subfield code="c">XD-US</subfield></datafield><datafield tag="049" ind1=" " ind2=" "><subfield code="a">DE-521</subfield><subfield code="a">DE-19</subfield></datafield><datafield tag="050" ind1=" " ind2="0"><subfield code="a">HB1</subfield></datafield><datafield tag="100" ind1="1" ind2=" "><subfield code="a">Baker, Malcolm</subfield><subfield code="e">Verfasser</subfield><subfield code="0">(DE-588)128831480</subfield><subfield code="4">aut</subfield></datafield><datafield tag="245" ind1="1" ind2="0"><subfield code="a">Corporate financing decisions when investors take the path of least resistance</subfield><subfield code="c">Malcolm Baker ; Joshua Coval ; Jeremy C. Stein</subfield></datafield><datafield tag="264" ind1=" " ind2="1"><subfield code="a">Cambridge, Mass.</subfield><subfield code="b">National Bureau of Economic Research</subfield><subfield code="c">2004</subfield></datafield><datafield tag="300" ind1=" " ind2=" "><subfield code="a">49 S.</subfield><subfield code="b">graph. Darst.</subfield></datafield><datafield tag="336" ind1=" " ind2=" "><subfield code="b">txt</subfield><subfield code="2">rdacontent</subfield></datafield><datafield tag="337" ind1=" " ind2=" "><subfield code="b">n</subfield><subfield code="2">rdamedia</subfield></datafield><datafield tag="338" ind1=" " ind2=" "><subfield code="b">nc</subfield><subfield code="2">rdacarrier</subfield></datafield><datafield tag="490" ind1="1" ind2=" "><subfield code="a">National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series</subfield><subfield code="v">10998</subfield></datafield><datafield tag="520" ind1="3" ind2=" "><subfield code="a">"We explore the consequences for corporate financial policy that arise when investors exhibit inertial behavior. One implication of investor inertia is that, all else equal, a firm pursuing a strategy of equity-financed growth will prefer a stock-for-stock merger to greenfield investment financed with an SEO. With a merger, acquirer stock is placed in the hands of investors, who, because of inertia, do not resell it all on the open market. If there is downward-sloping demand for acquirer shares, this leads to less price pressure than an SEO, and cheaper equity financing as a result. We develop a simple model to illustrate this idea, and present supporting empirical evidence. Both individual and institutional investors tend to hang on to shares granted them in mergers, with this tendency being much stronger for individuals. Consistent with the model and with this cross-sectional pattern in inertia, acquirers targeting firms with high institutional ownership experience more negative announcement effects and greater announcement volume. Moreover, the results are strongest when the overlap in target and acquirer institutional ownership is low and when the demand curve for the acquirer's shares appears to be steep"--National Bureau of Economic Research web site.</subfield></datafield><datafield tag="650" ind1=" " ind2="4"><subfield code="a">Ökonometrisches Modell</subfield></datafield><datafield tag="650" ind1=" " ind2="4"><subfield code="a">Corporations</subfield><subfield code="x">Finance</subfield><subfield code="x">Econometric models</subfield></datafield><datafield tag="700" ind1="1" ind2=" "><subfield code="a">Coval, Joshua</subfield><subfield code="e">Verfasser</subfield><subfield code="0">(DE-588)129717711</subfield><subfield code="4">aut</subfield></datafield><datafield tag="700" ind1="1" ind2=" "><subfield code="a">Stein, Jeremy C.</subfield><subfield code="d">1960-</subfield><subfield code="e">Verfasser</subfield><subfield code="0">(DE-588)124771726</subfield><subfield code="4">aut</subfield></datafield><datafield tag="776" ind1="0" ind2="8"><subfield code="i">Erscheint auch als</subfield><subfield code="n">Online-Ausgabe</subfield></datafield><datafield tag="830" ind1=" " ind2="0"><subfield code="a">National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series</subfield><subfield code="v">10998</subfield><subfield code="w">(DE-604)BV002801238</subfield><subfield code="9">10998</subfield></datafield><datafield tag="856" ind1="4" ind2="1"><subfield code="u">http://papers.nber.org/papers/w10998.pdf</subfield><subfield code="z">kostenfrei</subfield><subfield code="3">Volltext</subfield></datafield><datafield tag="999" ind1=" " ind2=" "><subfield code="a">oai:aleph.bib-bvb.de:BVB01-016906497</subfield></datafield></record></collection> |
| id | DE-604.BV023591167 |
| illustrated | Illustrated |
| index_date | 2024-07-02T22:41:27Z |
| indexdate | 2024-07-09T21:25:10Z |
| institution | BVB |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-016906497 |
| oclc_num | 57424098 |
| open_access_boolean | 1 |
| owner | DE-521 DE-19 DE-BY-UBM |
| owner_facet | DE-521 DE-19 DE-BY-UBM |
| physical | 49 S. graph. Darst. |
| publishDate | 2004 |
| publishDateSearch | 2004 |
| publishDateSort | 2004 |
| publisher | National Bureau of Economic Research |
| record_format | marc |
| series | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |
| series2 | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |
| spelling | Baker, Malcolm Verfasser (DE-588)128831480 aut Corporate financing decisions when investors take the path of least resistance Malcolm Baker ; Joshua Coval ; Jeremy C. Stein Cambridge, Mass. National Bureau of Economic Research 2004 49 S. graph. Darst. txt rdacontent n rdamedia nc rdacarrier National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 10998 "We explore the consequences for corporate financial policy that arise when investors exhibit inertial behavior. One implication of investor inertia is that, all else equal, a firm pursuing a strategy of equity-financed growth will prefer a stock-for-stock merger to greenfield investment financed with an SEO. With a merger, acquirer stock is placed in the hands of investors, who, because of inertia, do not resell it all on the open market. If there is downward-sloping demand for acquirer shares, this leads to less price pressure than an SEO, and cheaper equity financing as a result. We develop a simple model to illustrate this idea, and present supporting empirical evidence. Both individual and institutional investors tend to hang on to shares granted them in mergers, with this tendency being much stronger for individuals. Consistent with the model and with this cross-sectional pattern in inertia, acquirers targeting firms with high institutional ownership experience more negative announcement effects and greater announcement volume. Moreover, the results are strongest when the overlap in target and acquirer institutional ownership is low and when the demand curve for the acquirer's shares appears to be steep"--National Bureau of Economic Research web site. Ökonometrisches Modell Corporations Finance Econometric models Coval, Joshua Verfasser (DE-588)129717711 aut Stein, Jeremy C. 1960- Verfasser (DE-588)124771726 aut Erscheint auch als Online-Ausgabe National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 10998 (DE-604)BV002801238 10998 http://papers.nber.org/papers/w10998.pdf kostenfrei Volltext |
| spellingShingle | Baker, Malcolm Coval, Joshua Stein, Jeremy C. 1960- Corporate financing decisions when investors take the path of least resistance National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series Ökonometrisches Modell Corporations Finance Econometric models |
| title | Corporate financing decisions when investors take the path of least resistance |
| title_auth | Corporate financing decisions when investors take the path of least resistance |
| title_exact_search | Corporate financing decisions when investors take the path of least resistance |
| title_exact_search_txtP | Corporate financing decisions when investors take the path of least resistance |
| title_full | Corporate financing decisions when investors take the path of least resistance Malcolm Baker ; Joshua Coval ; Jeremy C. Stein |
| title_fullStr | Corporate financing decisions when investors take the path of least resistance Malcolm Baker ; Joshua Coval ; Jeremy C. Stein |
| title_full_unstemmed | Corporate financing decisions when investors take the path of least resistance Malcolm Baker ; Joshua Coval ; Jeremy C. Stein |
| title_short | Corporate financing decisions when investors take the path of least resistance |
| title_sort | corporate financing decisions when investors take the path of least resistance |
| topic | Ökonometrisches Modell Corporations Finance Econometric models |
| topic_facet | Ökonometrisches Modell Corporations Finance Econometric models |
| url | http://papers.nber.org/papers/w10998.pdf |
| volume_link | (DE-604)BV002801238 |
| work_keys_str_mv | AT bakermalcolm corporatefinancingdecisionswheninvestorstakethepathofleastresistance AT covaljoshua corporatefinancingdecisionswheninvestorstakethepathofleastresistance AT steinjeremyc corporatefinancingdecisionswheninvestorstakethepathofleastresistance |