Beschreibung:
This paper investigates the effects of pure secondary share offerings to highlight the corporate governance effect of equity offerings. We find that secondary offerings significantly decrease ownership concentration. Furthermore, firms conducting secondary offerings significantly increase dividend payouts and Tobin’s Q after the transaction. Although the announcement of secondary offerings receives negative stock price reactions in the short run, we witness a reversal and a positive performance in the long term. While previous studies commonly suggest that equity offerings cause negative stock returns, our results reveal that these transactions make managers protect minority shareholder wealth by unwinding ownership concentration