We use a large sample from 2001 to 2009 that incorporates intraday transactions data from 39 exchanges and an average of 12,800 different common stocks to assess the effect of algorithmic trading (AT) on firms’ capital raising activities. Greater AT reduces net equity issues over the next year, but this is only partly driven by AT’s effect on proceeds from new securities issues. Our findings suggest that the main driver of this relationship is AT’s effect on share repurchases.
Algorighmic trading, high frequency trading, capital raising, security issues
Finance and Financial Management | Real Estate | Technology and Innovation
BOEHMER, Ekkehart; FONG, Kingsley; and WU, Julie.
Algorithmic trading and changes in firms equity capital. (2012). Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/5301
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