Cross-sectional OLS regression of ICARs, probit regression of equity issuance choice, and predicted (matched) HCARs

Panel A of the table presents estimation results of a cross-sectional OLS regression of issuer CAR (ICAR) on issuer and offer characteristics common to both seasoned equity issuers and stock acquirers (Specification (1)). It also reports estimation results of a probit regression of a choice between issuing stock via a stock-financed acquisition and an SEO using the same explanatory variables (Specification (2)). Panel B presents hypothetical SEO returns (HCAR) for sample stock-acquirers estimated via linear prediction based on the parameter estimates of (1), and via propensity-score matching with the propensity score based on the estimation results of (2). All variables are defined in the Appendix. The t -statistics ( Z -statistics for the probit regression) are based on heteroskedasticity-robust standard errors clustered at the firm level. Symbols ***, **, and * denote statistical significance at the 1%, 5%, and 10% level, respectively. N denotes the number of observations. Panel C presents matching diagnostics for the propensity-score matching methodology. % |Diff | is the absolute difference in means for stock acquirers and SEO firms, as percentage of the former. % Δ |Diff| is the achieved percentage reduction in the absolute difference in means for stock-acquirers and SEO firms resulting from matching (negative values indicate increases in differences). The p -values for the differences in means for the two samples are also presented.