Strategic benefits to firms issuing private equity placements

Strategic Management Journal

Volumn 25, Issue 3, 2004, Pages 223-242

  Folta, Timothy B ^b   Janney, Jay J ^a  

^a UNIVERSITY OF DAYTON   (United States)

^b PURDUE UNIVERSITY   (United States)

Author keywords

Financing strategy; Information asymmetry; Private equity; Signaling

Indexed keywords

COST BENEFIT ANALYSIS; INDUSTRIAL ECONOMICS; INDUSTRIAL MANAGEMENT; RESEARCH AND DEVELOPMENT MANAGEMENT; SOCIETIES AND INSTITUTIONS; STRATEGIC PLANNING;

EQUITY FIRMS; EQUITY MARKETS;

INVESTMENTS;

EID: 1242265416     PISSN: 01432095     EISSN: None     Source Type: Journal    
DOI: 10.1002/smj.373     Document Type: Article

References (33)

1. Arrow KJ. 1985. The economics of agency. In Principals and Agents: The Structure of Business, Pratt JW, Zeckhauser RJ (eds). Harvard Business School Press: Boston, MA; 37-51.
2. Balakrishnan S, Fox I. 1993. Asset specificity, firm heterogeneity and capital structure. Strategic Management Journal 14(1): 3-16.
3. Barney JB. 1986. Strategic factor markets: expectations, luck, and business strategy. Management Science 32(10): 1230-1241.
4. Blackwell DW, Kidwell DS. 1988. An investigation of cost differences between public sales and private placements of debt. Journal of Financial Economics 22(2): 253-278.
5. Bromiley P. 1990. On the use of financial theory in strategic management. In Advances in Strategic Management, Vol. 6, Shrivastava P, Lamb R (eds). JAI Press: Greenwich, CT; 71-98.
6. Campbell JY, Lo AW, MacKinlay AC. 1997. The Econometrics of Financial Markets. Princeton University Press: Princeton, NJ.
7. Deeds DL, DeCarolis D, Coombs JE. 1997. The impact of firm-specific capabilities on the amount of capital raised in an initial public offering: evidence from the biotechnology industry. Journal of Business Venturing 12(1): 31-46.
8. Dodd P, Warner JB. 1983. On corporate governance: a study of proxy contests. Journal of Financial Economics 11(1-4): 401-438.
9. Fenn GW, Liang N, Prowse S. 1997. The private equity market: an overview. Financial Markets, Institutions & Instruments 6: 1-105.
10. Gompers PA. 1995. Optimal investment, monitoring, and the staging of venture capital. Journal of Finance 50(5): 1461-1489.
11. Heil O, Robertson TS. 1991. Toward a theory of competitive market signaling: a research agenda. Strategic Management Journal 12(6): 403-418.
12. Hertzel M, Rees L. 1998. Earnings and risk changes around private placements of equity. Journal of Accounting, Auditing, and Finance: 21-35.
13. Hertzel M, Smith RL. 1993. Market discounts and shareholder gains for placing equity privately. Journal of Finance 48(2): 459-485.
14. Hertzel M, Lemmon M, Linck J, Rees L. 2002. Long-run performance following private placements of equity. Journal of Finance 57(6): 2595-2617.
15. Jensen M: C, Meckling W. 1976. Theory of the firm: managerial behavior, agency costs, and capital structure. Journal of Financial Economics 3: 305-360.
16. Kang JK, Kim YC, Stulz RM. 1999. The underreaction hypothesis and the new issue puzzle: evidence from Japan. Review of Financial Studies 12(3): 519-534.
17. Kochhar R. 1996. Explaining firm capital structure: the role of agency theory vs. transaction cost economics. Strategic Management Journal 17(9): 713-728.
18. Lerner J. 1994. Venture capitalists and the decision to go public. Journal of Financial Economics 35(3): 293-316.
19. Lerner J. 1995. Venture capitalists and the oversight of private firms. Journal of Finance 50(1): 301-318.
20. Lin DY, Wei LJ. 1989. The robust inference for the Cox proportional hazards model. Journal of the American Statistical Association 84: 1074-1078.
21. Lippman SA, Rumelt RP. 1982. Uncertain imitability: an analysis of interfirm differences in efficiency under competition. Bell Journal of Economics 13(2): 418-438.
22. Myers SC, Majiluf NS. 1984. Corporate financing and investment decisions when firms have information that investors do not. Journal of Financial Economics 13: 575-591.
23. Sandberg CM, Lewellen WG, Stanley KL. 1987. Financial strategy: planning and managing the corporate leverage position. Strategic Management Journal 8(1): 15-24.
24. Sharpe WF, Alexander G, Bailey JV. 1999. Investments. Prentice-Hall: Upper Saddle River, NJ.
25. Sheehan D, Swisher J. 1998. How sophisticated are 'sophisticated investors'? Working paper, Pennsylvania State University.
26. Silverman BS, Nickerson JA, Freeman J. 1997. Profitability, transactional alignment, and organizational mortality in the U.S. trucking industry. Strategic Management Journal, Summer Special Issue 18: 31-52.
27. Smith CW. 1986. Investment banking and the capital acquisition process. Journal of Financial Economics 15: 3-29.
28. Stuart TE, Hoang H, Hybels RC. 1999. Interorganizational endorsements and the performance of entrepreneurial ventures. Administrative Science Quarterly 44(2): 315-349.
29. Teece DJ. 1996. Firm organization, industry structure, and technological innovation. Journal of Economic Behavior & Organization 31: 193-224.
30. Theil H. 1971. Principles of Econometrics. Wiley: New York.
31. Wernerfelt B, Montgomery CA. 1988. Tobin-q and the importance of focus in firm performance. American Economic Review 78(1): 246-250.
32. Williamson OE. 1988. Corporate finance and corporate governance. Journal of Finance 43: 567-591.
33. Wruck KH. 1989. Equity ownership concentration and firm value: evidence from private equity financings. Journal of Financial Economics 23(1): 3-28.