World markets for raising new capital
By: Brian J. Henderson, Narasimhan Jegadeesh, Michael S. Weisbach.
Contributors: Jegadeesh, Narasimhan.; Weisbach, Michael S.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10225; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10225.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Investments, Foreign.
Description: "Financial markets are increasingly integrated globally.  We examine the extent to which firms from different countries rely on alternative sources of capital, the locations where they raise capital, and the factors that affect these choices.  During the 1990-2001 period, firms raised about $25.9 trillion of new capital, including $4.7 trillion from abroad.  International debt issuances are substantially more common than equity, accounting for over 90% of the international security issues, and about 20% of all public debt issues.  In contrast, international equity issues account for about 4.4% of all international security issues, and about 6% of all equity issues during our sample period.  Market timing considerations appear to be very important in security issuance decisions.  Firms all around the world are more likely to issue equity prior to periods of low market returns.  Most of the cross-border equity is issued in the U.S.  and the U.K., and these issues tend to occur in 'hot' markets and prior to relatively low market returns.  Finally, firms issue more debt when interest rates are lower, and issue debt overseas when interest rates in the place of issue are lower than they are at home"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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