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Title: Seasoned equity offerings and customer–supplier relationships
Authors: Johnson, William C.
Kang, Jun-Koo
Masulis, Ronald W.
Yi, Sangho
Keywords: Seasoned Equity Offering
Large Customer
Issue Date: 2018
Source: Johnson, W. C., Kang, J.-K., Masulis, R. W., & Yi, S. (2018). Seasoned equity offerings and customer–supplier relationships. Journal of Financial Intermediation, 33, 98-114. doi:10.1016/j.jfi.2017.09.003
Series/Report no.: Journal of Financial Intermediation
Abstract: We investigate how seasoned equity offerings (SEOs) by issuers with large customers affect both trading partners’ market values and the relationship's health. We hypothesize that SEOs reveal adverse information about an issuer's major customers and find that issuers and their large customers experience negative returns on SEO announcements. These results are more pronounced when customers have higher levels of information asymmetry and when customer-supplier relationships are particularly important. Large customers of issuers experience larger declines in post-SEO sales, operating performance, and credit ratings than large customers of non-issuers. Also, SEO issuer sales to large customers and relationship duration significantly decline.
ISSN: 1042-9573
DOI: 10.1016/j.jfi.2017.09.003
Rights: © 2017 Elsevier Inc. All rights reserved. This paper was published in Journal of Financial Intermediation and is made available with permission of Elsevier Inc.
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:NBS Journal Articles

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