Equity financing in a Myers-Majluf framework with private benefits of control

Journal of Corporate Finance

Volumn 11, Issue 5, 2005, Pages 915-945

  Wu, Xueping ^a   Wang, Zheng ^b  

^a CITY UNIVERSITY OF HONG KONG   (Hong Kong)

^b CITIC Fund Management   (China)

Author keywords

Announcement effect; Equity financing; Overinvestment; Private benefits of control; Underinvestment

Indexed keywords

EID: 24944474077     PISSN: 09291199     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jcorpfin.2004.04.001     Document Type: Article

References (49)

1. Aggarwal, R.K., Samwick, A.A., 1999. Empire-builders and shirkers: investment, firm performance, and managerial incentives. NBER Working Paper, No. 7335.
2. G.A. Akerlof The market for 'lemons': Quality and the market mechanism Quarterly Journal of Economics 84 1970 488-500
3. R. Ambarish K. John J. Williams Efficient signaling with dividends and investments Journal of Finance 42 1987 321-344
4. P. Asquith D. Mullins Equity issues and stock price dilution Journal of Financial Economics 15 1986 61-90
5. M. Baker J. Wurgler Market timing and capital structure Journal of Finance 57 2002 1-32
6. M. Barclay C. Holderness Private benefits from control of public corporations Journal of Financial Economics 25 1989 371-395
7. Barclay, M., Holderness, C., Sheehan, D., 2001. The block pricing puzzle. Working Paper, No. FR 01-05, Simon Graduate School of Business Administration, University of Rochester.
8. Bebchuk, L., 1999. A rent-protection theory of corporate ownership and control. NBER Working Paper, No. 7203.
9. J. Cooney A. Kalay Positive information from equity issue announcements Journal of Financial Economics 33 1993 149-172
10. K. Daniel S. Titman Financing investment under asymmetric information In: R.A. Jarrow W.T. Ziemba V. Maksimovic (Eds.), Finance, Handbooks in Operational Research and Management Science vol. 9 1995 North-Holland Amsterdam 721-766
11. H. DeAngelo L. DeAngelo Managerial ownership of voting rights Journal of Financial Economics 14 1985 33-69
12. H. Demsetz B. Villalonga Ownership structure and corporate performance Journal of Corporate Finance 7 2001 209-233
13. D. Denis Investment opportunities and the market reaction to equity offerings Journal of Financial and Quantitative Analysis 29 1994 159-177
14. D.K. Denis J. McConnell International corporate governance Journal of Financial and Quantitative Analysis 38 2003 1-36
15. P. Dybvig J. Zender Capital structure and dividend irrelevance with asymmetric information Review of Financial Studies 4 1 1991 201-221
16. B. Eckbo R. Masulis Seasoned equity offerings: A survey In: R.A. Jarrow W.T. Ziemba V. Maksimovic (Eds.), The Finance Handbook vol. 9 1995 North-Holland Amsterdam 1017-1072
17. E. Fama K. French Testing trade-off and pecking order predictions about dividends and debt Review of Financial Studies 15 1 2002 1-33
18. S. Grossman O. Hart One share-one vote and the market for corporate control Journal of Financial Economics 20 1988 175-202
19. M. Harris A. Raviv Corporate governance: Voting rights and majority rules Journal of Financial Economics 20 1988 203-235
20. C.P. Himmelberg R.G. Hubbard D. Palia Understanding the determinants of managerial ownership and the link between ownership and performance Journal of Financial Economics 53 1999 353-383
21. M. Jensen Agency costs of free-cash-flow, corporate finance, and takeovers American Economic Review 76 1986 323-329
22. M. Jensen W.H. Meckling Theory of the firm: Managerial behavior, agency costs and ownership structure Journal of Financial Economics 3 1976 305-360
23. K. John J. Williams Dividends, dilution and taxes: A signaling equilibrium Journal of Finance 40 1985 1053-1070
24. K. Jung Y. Kim R. Stulz Timing, investment opportunities, managerial discretion, and the security issue decision Journal of Financial Economics 42 1996 159-185
25. J. Kang R. Stulz How different is Japanese corporate finance? An investigation of the information content of new security issues Review of Financial Studies 9 1 1996 109-139
26. C. Kim D. Mauer A. Sherman The determinants of corporate liquidity: theory and evidence Journal of Financial and Quantitative Analysis 33 1998 335-359
27. R. La Porta F. Lopez-de-Silanes A. Shleifer Corporate ownership around the world Journal of Finance 55 1999 471-517
28. R. La Porta F. Lopez-de-Silanes A. Shleifer R. Vishny Investor protection and corporate governance Journal of Financial Economics 58 2000 3-28
29. R.C. Lease J. McConnell W.H. Mikkelson The market value of control in publicly-traded corporations Journal of Financial Economics 11 1983 439-471
30. N. Leff Economic development through bureaucratic corruption American Behavioral Scientist 8 1964 8-14
31. R. Masulis A. Korwar Seasoned equity offerings: An empirical investigation Journal of Financial Economics 15 1986 91-118
32. J. McConnell H. Servaes Additional evidence on equity ownership and corporate value Journal of Financial Economics 27 1990 595-612
33. J. McConnell H. Servaes Equity ownership and the two faces of debt Journal of Financial Economics 39 1995 131-157
34. M. Miller K. Rock Dividend policy under asymmetric information Journal of Finance 40 1985 1031-1052
35. R. Morck A. Shleifer R. Vishny Management ownership and market valuation: An empirical analysis Journal of Financial Economics 20 1988 293-315
36. S. Myers Determinants of corporate borrowing Journal of Financial Economics 5 1977 147-175
37. S. Myers The capital structure puzzle Journal of Finance 39 1984 575-592
38. S. Myers Outside equity Journal of Finance 55 2000 1005-1037
39. S. Myers Financing of corporations In: R. Stulz (Ed.), Handbook of the Economics of Finance 2002 In press
40. S. Myers N. Majluf Corporate financing and investment decisions when firms have information that investors do not have Journal of Financial Economics 13 1984 187-221
41. T. Opler L. Pinkowitz R. Stulz R. Williamson The determinants and implications of corporate cash holdings Journal of Financial Economics 52 1999 3-46
42. E. Pilotte Growth opportunities and the stock price response to new financing Journal of Business 65 1992 371-394
43. A. Shleifer R.W. Vishny A survey of corporate governance Journal of Finance 52 1997 737-783
44. C. Smith Investment banking and the capital acquisition process Journal of Financial Economics 15 1986 3-29
45. R. Stulz Managerial control of voting rights: Financing policies and the market for corporate control Journal of Financial Economics 20 1988 25-54
46. R. Stulz Managerial discretion and optimal financing policies Journal of Financial Economics 26 1990 3-27
47. Wu, X., Wang, Z., 2003. Understanding the positive announcement effects of private equity placement: New insights from Hong Kong data. Working Paper. Department of Economics and Finance, City University of Hong Kong.
48. Wu, X., Wang, Z., 2004. Private benefits of control and the choice of seasoned equity flotation methods. Working Paper. Department of Economics and Finance, City University of Hong Kong.
49. L. Zingales The value of the voting right: A study of the Milan Stock Exchange experience Review of Financial Studies 7 1 1994 125-148