Ritter (2002)

Reference

Investment Banking and Securities Issuance^aaa

Jay R. Ritter

Chapter 9 of North-Holland Handbook of the Economics of Finance edited by George Constantinides, Milton Harris, and René Stulz, forthcoming 2002.

Synopsis

This paper summarizes research analyzing the securities issuance process, with an emphasis on equity issuances. Section 3 and Table 5 of the paper provide a good summary of past research examining the short-run and long-run stock price reactions to corporate financing activities. In general, the patterns suggest that firms distributing cash back to capital markets have higher future stock returns, while firms raising new cash from capital markets have lower future stock returns.