The long-run performance following Japanese rights issues

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

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Original languageEnglish
Pages (from-to)419-434
Journal / PublicationApplied Financial Economics
Issue number4
Publication statusPublished - 1998


Japanese firms conducting 260 rights issues on the Tokyo Stock Exchange between 1971 and 1986 have subsequently performed poorly. The long-term downward drift is remarkably similar to those following Japanese initial public offerings and seasoned equity offerings, accompanied by a reliable pattern of post-issue deterioration of accounting profitability. The evidence therefore reinforces the 'windows of opportunity' explanation for the new issue puzzle, since rights issues involve much fewer changes in corporate ownership structure.