Abstract

This study conducts a systematic analysis of seasoned equity offerings across a sample of twelve countries with differing legal systems at the micro level from 2009 to 2019. Civil law countries have been shown to exhibit reduced shareholder protection rights, causing the cost of equity for firms in those countries to be higher and thus making equity issues less attractive. In this paper, we start by using a series of logistic regressions to examine if firms in civil law countries are less likely to pursue financing through seasoned equity offers. More importantly, we employ a range of interaction variables to examine whether the SEO decision policies and likelihood to issue SEOs differ across legal systems based on firm-specific characteristics. Our results indicate significant differences in SEO decision relevance for some firm-specific variables. The results were mainly robust across our subsamples and alternate models, with a few exceptions specifically for our size subsamples.