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Conglomerate structure and capital market timing

Version 2 2024-06-17, 20:16
Version 1 2016-09-02, 15:24
journal contribution
posted on 2024-06-17, 20:16 authored by X Chang, G Hilary, CM Shih, LHK Tam
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.

History

Journal

Financial management

Volume

39

Season

Winter

Pagination

1307-1338

Location

Hoboken, N.J.

ISSN

0046-3892

eISSN

1755-053X

Language

eng

Publication classification

C Journal article, C1.1 Refereed article in a scholarly journal

Copyright notice

2010, Financial Management Association International

Issue

4

Publisher

Wiley-Blackwell

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