Investors’ Information Acquisition and Firm Financing Decisions: Evidence from a Natural Experiment

 

　　时间：2022年3月23日 14:30-16:00

　　地点：后主楼1722

　　主持人：崔学刚北京师范大学经济与工商管理学院教授

　　

　　Abstract:

　　Using the SEC’s 2016 Tick Size Pilot Program (TSPP) as a natural experiment, we investigate the effects of a tick size increase on equity versus debt issuance. TSPP reduces algorithmic trading and increases investors’ fundamental information acquisition and trading activities, meaning that the program reduces the information asymmetry between the firm and its investors. According to the pecking order theory, treatment firms under TSPP would increase their preference for equity issuances. Using a difference-in-differences research design, we find a significant increase in the preference for equity issuances over debt issuances. Furthermore, we find that this increase is concentrated among the treatment firms that experience decreases in algorithmic trading and increases in information acquisition activities. Also, consistent with information asymmetry having a role in firms’ financing choices, we find that the increase is concentrated in those treatment firms with a higher level of information asymmetry prior to the program. In supplementary analyses, we find an increase in the size of equity issuances and a reduction in the SEO pricing discount for the treatment firms. Taken together, our results suggest that adverse selection has a causal effect on firms’ financing choices in a way that is consistent with pecking order theory.

　　

　　Keywords: Tick Size Pilot Program; fundamental information acquisition; information asymmetry; small-cap firm financing

　　

　　

 

　　报告人简介：

　　杨馨，中央财经大学会计学院助理教授，博士毕业于香港理工大学，主要研究方向是信息披露、股价崩盘风险等。目前已在Journal of Accounting Research，Journal of Corporate Finance发表文章。