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Firm Size and the Information Content of Over-the-Counter Common Stock Offerings

Author

Listed:
  • Robert M. Hull

    (Washburn University)

  • George E. Pinches

    (University of Kansas)

Abstract

We examine the announcement period of stock returns for 179 over-the-counter (OTC) firms that issue common stock to reduce nonconvertible debt. We find that small OTC firms experience returns that are significantly more negative than large OTC firms. Regression tests reveal that firm size is a significant factor in accounting for stock returns. Other tests establish as firm size a dominant effect. Our support for a firm size effect is consistent with a differential information effect given that firm size is positively related to the amount of information available about firms.

Suggested Citation

  • Robert M. Hull & George E. Pinches, 1995. "Firm Size and the Information Content of Over-the-Counter Common Stock Offerings," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 4(1), pages 31-55, Spring.
    • Handle: RePEc:pep:journl:v:4:y:1995:i:1:p:31-55
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Firm Size ; Information; OTC; Stock Offerings; Stock;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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