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Does shareholder coordination matter? Evidence from private placements
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Chakraborty, Indraneel and Gantchev, Nickolay (2013) Does shareholder coordination matter? Evidence from private placements. Journal of Financial Economics, 108 (1). pp. 213-230. doi:10.1016/j.jfineco.2012.10.001 ISSN 0304-405X.
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WRAP-does-shareholder-coordination-matter-Gantchev-2013.pdf - Accepted Version - Requires a PDF viewer. Available under License Creative Commons Attribution Non-commercial No Derivatives 4.0. Download (1017Kb) | Preview |
Official URL: http://dx.doi.org/10.1016/j.jfineco.2012.10.001
Abstract
We propose a new role for private investments in public equity (PIPEs) as a mechanism to reduce coordination frictions among existing equity holders. We establish a causal link between the coordination ability of incumbent shareholders and PIPE issuance. This result obtains even after controlling for alternative explanations such as information asymmetry and access to public markets. Improved equity coordination following a private placement leads to favorable debt renegotiations within one year of issuance. Mitigating coordination frictions among shareholders ultimately decreases the odds of firm default in half.
| Item Type: | Journal Article | ||||||||
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| Subjects: | H Social Sciences > HG Finance K Law [Moys] > KN Common Law, Private Law |
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| Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
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| Library of Congress Subject Headings (LCSH): | Private investments in public equity , Privately placed securities , Corporations -- Finance, Equity , Stockholders' derivative actions , Debt relief | ||||||||
| Journal or Publication Title: | Journal of Financial Economics | ||||||||
| Publisher: | Elsevier Science BV | ||||||||
| ISSN: | 0304-405X | ||||||||
| Official Date: | April 2013 | ||||||||
| Dates: |
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| Volume: | 108 | ||||||||
| Number: | 1 | ||||||||
| Page Range: | pp. 213-230 | ||||||||
| DOI: | 10.1016/j.jfineco.2012.10.001 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| Date of first compliant deposit: | 11 November 2020 | ||||||||
| Date of first compliant Open Access: | 11 November 2020 |
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