Brugler, James
[VerfasserIn]
;
Comerton-Forde, Carole
[Sonstige Person, Familie und Körperschaft];
Hendershott, Terrence
[Sonstige Person, Familie und Körperschaft]
Does Financial Market Structure Impact the Cost of Raising Capital?
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 3, 2020 erstellt
Beschreibung:
We provide evidence on market structure and the cost of raising capital by examining market structure changes in US equity markets. Only the Nasdaq's Order Handling Rules (OHR), the one reform that reduced institutional trading costs, lowered the cost of raising capital. Using a difference-in-differences framework relative to the NYSE and that exploits the OHR's staggered implementation, we find that the OHR reduced the underpricing of seasoned equity offerings by one to two percentage points compared to a pre-OHR average of 3.6 percent. The effect is largest in stocks with the largest reduction in institutional trading costs after the OHR