Seminario académico Finanzas y Contabilidad: "Capital Inflows and Equity Issuance Activity"

7 de Julio, 13:00 horas. Sala P307.

Expone: Mauricio Larraín, profesor asistente en la Escuela de Negocios PUC.

We use issuance-level data to study the relation between capital inflows, issuance of equity, and corporate investment by emerging market firms. We find that a one-dollar increase in equity inflows is associated with a 60-cents increase in country-level equity issuance proceeds. We show that this relationship is driven primarily by a group of large-issuing firms. Large issuers are more likely to raise equity after their country receives an inflow of capital from abroad. We use the interaction between global mutual fund flows and MSCI portfolio weights as an instrument for capital inflows to show that our results are driven in part by increased foreign equity capital supply. Finally, we show that for every dollar raised in an offering, large issuers increase corporate investment by 40 cents.