Ch. 6: Security Offerings 319
Ta b l e 1 4
Average market reaction (AR, %) to announcements of seasoned equity offerings (SEOs) internationally,
classified by flotation method
Country Study Sample
size
Sample
periodAR
(%)(a) Uninsured rights:N=484;ARur= 0. 70
Korea Kang (1990) 89 1984–1988 0 .95%
Greece Tsangarakis (1996) 55 1981–1990 3. 97 ∗
Norway Bøhren, Eckbo, and Michalsen (1997) 74 1980–1993 1. 55 ∗
Italy Bigelli (1998) 82 1980–1994 0. 79
U.K. Slovin, Sushka, and Lai (2000) 20 1986–1994 − 4. 96 ∗
France Gajewski and Ginglinger (2002) 57 1986–1996 − 1. 11 ∗
Sweden Cronqvist and Nilsson (2005) 107 1986–1999 0. 19
(b) Standby rights:N= 1 ,201;ARsr=− 1. 32 ∗
Japan Kang and Stulz (1996) 28 1985–1991 2. 21 ∗
Norway Bøhren, Eckbo, and Michalsen (1997) 114 1980–1993 − 0. 23
France Gajewski and Ginglinger (2002) 140 1986–1996 − 0. 74 ∗
Norway Eckbo and Norli (2004) 143 1980–1996 − 0. 58
Sweden Cronqvist and Nilsson (2005) 53 1986–1999 0. 72
U.K. Burton, Lonie, and Power (1999)a 37 1989–1991 − 7. 76 ∗
U.K. Slovin, Sushka, and Lai (2000)b 200 1986–1994 − 2. 90 ∗
Hong Kong Wu and Wang (2006b) 180 1989–1997 − 3. 37 ∗
(c) Private placement:N=691;ARpp= 3. 12 ∗
U.K. Slovin, Sushka, and Lai (2000)c 76 1986–1994 3. 31 ∗
Norway Eckbo and Norli (2004) 136 1980–1996 1. 39
Sweden Cronqvist and Nilsson (2005) 136 1986–1999 7. 27 ∗
Japan Kato and Schallheim (1993) 76 1974–1988 4. 28 ∗
Japan Kang and Stulz (1996) 69 1985–1991 3. 88 ∗
Hong Kong Wu, Wang, and Yao (2005) 99 1989–1997 1. 97 ∗
standby rights in a single sample.Eckbo and Masulis (1995)survey several of these
pooled rights and standby samples, includingMarsh (1979)(U.K.),Loderer and Zim-
mermann (1987)(Switzerland),Hietala and Loyttyniemi (1991)(Finland), andDehnert
(1991)(Australia). The main conclusion in the earlier survey was that “the average
market reaction is typically positive for uninsured rights and small, but negative for
standbys” (p. 1046). They do not report studies on firm commitment offerings interna-
tionally.
The evidence summarized inTable 14goes further. Starting with uninsured rights
offerings in Panel (a), uninsured rights offers are associated with a neutral or positive
market reaction in smaller markets such as Greece, Norway and Sweden, but a negative
market reaction in larger markets such as France and the U.K.Tsangarakis (1996)and
Bøhren, Eckbo, and Michalsen (1997)report a significantly positive market reaction