HOW DIFFERENT IS JAPANESE CORPORATE-FINANCE - AN INVESTIGATION OF THEINFORMATION-CONTENT OF NEW SECURITY ISSUES

This article studies the shareholder wealth effects associated with 87 5 new security issues in Japan from January 1, 1985, to May 31, 1991. The announcement of convertible debt Issues has a significant positive abnormal return of 1.05 percent. There is an abnormal return of 0.45 percent at the announcement of equity issues that is offset by an abno rmal return of 1.01 percent on the issue day. Abnormal returns are neg atively, related to firm size, so that large Japanese firms have abnor mal returns less different from those of U.S. firms than small Japanes e firms. Our evidence Is consistent with the view that Japanese manage rs decide to issue shares based on different considerations than Ameri can managers.