Convertible bond announcement effects: why is Japan different?

Dutordoir, M., Li, H., Liu, F. H. and Verwijmeren, P. (2016) Convertible bond announcement effects: why is Japan different? Journal of Corporate Finance, 37, pp. 76-92. (doi:10.1016/j.jcorpfin.2015.12.006)

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Abstract

U.S. and Japanese firms dominate global convertible bond issuance. Previous research documents more favorable convertible bond announcement effects in Japan than in the U.S. and other developed countries. Using a global sample of convertible bonds issued from 1982 to 2012, we find that the more favorable announcement effects of Japanese convertibles are driven by their stated uses of proceeds. Japanese convertibles more often include capital expenditure as an intended use, while U.S. firms tend to mention general purposes to motivate their offering. Our findings illustrate the value to firms of being more explicit when disclosing the intended use of proceeds of security offerings.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Verwijmeren, Professor Patrick and Dutordoir, Dr Marie Denise and Liu, Dr Hong and Li, Miss Hui
Authors: Dutordoir, M., Li, H., Liu, F. H., and Verwijmeren, P.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Journal of Corporate Finance
Publisher:Elsevier
ISSN:0929-1199
ISSN (Online):1872-631
Published Online:22 December 2015
Copyright Holders:Copyright © 2015 Elsevier B.V.
First Published:First published in Journal of Corporate Finance 37:76-92
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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