Equity Market Timing: Testing Using Brazilian IPOs
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Abstract
This paper analyzes whether the behavior related to the equity market timing affected the recent IPO wave of Brazilian firms and exerted an impact on companies'capital structure. Using data from january 2004 to december 2007 the paper classifies the months in the sample in hot or cold according the number of IPOs that took place in each month. The paper confirms an oportunistic behavior by the firms that issue a higher volume of stocks in periods classified as hot. The paper also shows that the impact of this behavior on companies` capital structure is very limited. Although there is a reduction in companies` leverage right after the IPO, this returns to its previous level only a few quarters after the IPO.
(Full article available in Portuguese only)
(Full article available in Portuguese only)
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