We argue that convertible securities can better attract investors with different beliefs on the firm’s future cash flows compared to straight bond and stock. We find that a firm is more likely to issue convertibles rather than stock and straight bond when investors are more heterogeneous in their beliefs. We also find that the positive impact of heterogeneous beliefs on the likelihood of a conv...

Article history: Received 6 April 2007 Received in revised form 19 September 2008 Accepted 19 September 2008 Available online 11 October 2008 We examine investment banks' networking function in capital markets, using a sample of Private Investments in Public Equity (PIPEs). We argue that investment banks develop relationships with investors through repeat dealings, and that investment banks' ne...

When capital is sunk after it is invested, a host government facing heterogeneous foreign investors has a strong incentive to reduce preferential taxes over time in order to attract less eager investors while fully expropriating past investors. This induces investors to wait rather than invest in the initial period, and leads to loss of tax revenue. This dynamic inconsistency problem is resolve...

Bilateral Investment Treaties (BITs) are the primary legal mechanism protecting foreign direct investment (FDI) around the world. BITs are thought to encourage FDI by establishing a broad set of investor’s rights and by allowing investors to sue a host state in an international tribunal if these rights are violated. Perhaps surprisingly, the empirical literature connecting BITs to FDI flows has...

This paper analyzes bidding data of IPO auctions held in Taiwan to address three questions. First, several studies on bookbuilding IPOs have shown that allocation policies favor institutional investors. Would auctions be a fairer mechanism to retail investors? Second, Sherman (2002) argues that bookbuilding has an edge over auctions in IPO pricing. What empirical evidence can be offered to sugg...

Using a data set for 162 largest Hungarian firms during the period of 1994-1999 this paper explores the determinants of equity shares held by foreign investors and by Hungarian institutional investors.. We find evidence of a post-privatisation evolution towards more homogeneus equity structures, where dominant categories of owners aim at achieving controlling stakes. Here, the foreign investors...

Policymakers in both the developed and less developed worlds have increasingly considered intellectual property protection as a major means to attract foreign direct investment (Yu, 2007, pp. 892–901). However, stronger intellectual property protection is not always needed to attract such investment. In the case of China, foreign investors were not attracted by the strong intellectual property ...

the aim of this research paper was to determine the role of urban space design on cities competitiveness in the process of globalization. in the era of globalization and with the rush of investors to find attractive places for investment, cities are becoming the focal points for investors and the urban managers, who need to present a variety of attractions to draw financial capital and be able ...