Nnadi, MI, Sorwar, G, Eskandari, R and Chizema, A (2021) Political Connections and Seasoned Equity Offerings. Journal of Banking & Finance, 133 (106312). ISSN 0378-4266

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This study examines the impact of political connections on seasoned equity offerings. Using seasoned equity offerings (SEOs) from 2001 to 2018 in the USA, we find that politically connected issuers enjoy a lower cost of seasoned equity issuance than their non-connected counterparts. Our empirical evidence is robust to controls for firm characteristics, corporate governance features, propensity score matching models, and an instrumental variable approach. Moreover, connected issuers conducting primary offerings and those operating in high corrupt states benefitted more from their political connections. Overall, our evidence is consistent with the view that political connections reduce the cost of raising external capital.

Item Type: Article
Additional Information: Crown Copyright © 2021 Published by Elsevier B.V. All rights reserved. The final version of this article can be found online with all the relevant information, including copyrights, on the publishers site at; https://www.sciencedirect.com/science/article/pii/S0378426621002648?via%3Dihub
Uncontrolled Keywords: Seasoned equity offerings, Political connections, Gross spread, Shareholder value, Event study
Subjects: J Political Science > JA Political science (General)
J Political Science > JC Political theory
Divisions: Faculty of Humanities and Social Sciences > Keele Business School
Depositing User: Symplectic
Date Deposited: 15 Sep 2021 14:11
Last Modified: 10 Feb 2022 14:40
URI: https://eprints.keele.ac.uk/id/eprint/10000

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