Strategic Alliances and Equity Issuances: Evidence from PIPE
Stuart School of Business research presentation by: Associate Professor of Finance Haizhi Wang and Jianrong Wang, Stuart Ph.D. student
Strategic Alliances and Equity Issuances: Evidence from PIPE
- Associate Professor of Finance Haizhi Wang
- Jianrong Wang, Stuart Ph.D. student
Abstract:
In this study, we focus on the role of alliance experiences in the PIPE issuance. Relying on the data collected from PlacementTracker and SDC platinum, we empirically investigate the relationship between issuers’ technology alliance experiences and PIPE contracts. We document that the greater alliance experiences at the time of the PIPE issuance, the smaller PIPE price discount and less contract terms that are favorable to investors. The results indicate that the technology alliance experience mitigates the information asymmetry and provides an endorsement effect. Our findings are robust after addressing the potential endogeneity issues.
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