Information Asymmetry and Equity Issues
- 1 June 1991
- journal article
- Published by JSTOR in Journal of Financial and Quantitative Analysis
- Vol. 26 (2) , 181
- https://doi.org/10.2307/2331264
Abstract
The paper examines the relevance of information asymmetry between the managers of the firm and the market for the equity issue process. It uses four proxies for information asymmetry and presents three groups of tests: cross-sectional regressions of the reaction at equity issue announcements, comparisons of information asymmetry before and after the announcements, and analyses of the timing behavior observed during the equity issue process. The results show that information asymmetry is a significant variable for equity issues.Keywords
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