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- Title
The Impact of Firm Location on Equity Issuance.
- Authors
Loughran, Tim
- Abstract
In this paper, I use location as a proxy for the ability of a firm m issue equity. Numerous studies indicate that investors are better able to obtain information on nearby companies. I posit that costs in generating information will be higher for rural firms with few investors in their proximity. than for urban firms with maw nearby investors. As predicted, I find that rural firms are less likely to conduct seasoned equity offerings than firms located in urban areas. Furthermore, I find that when a rural firm issues equity, it uses a lower-quality underwriter than otherwise similar urban firms.
- Subjects
STOCKS (Finance); CORPORATE finance; INVESTORS; COST; RURAL geography; METROPOLITAN areas
- Publication
Financial Management (Wiley-Blackwell), 2008, Vol 37, Issue 1, p1
- ISSN
0046-3892
- Publication type
Article
- DOI
10.1111/j.1755-053X.2008.00004.x