Essays on security issuance

This dissertation examines several issues in the security offering process. The study of the relation between underwriter reputation and underpricing investigates how the relation between these two changed over time. I propose a 'rational competition hypothesis' which predicts that the relation between underwriter reputation and underpricing should change in different market conditions. I find that underwriter reputation and underpricing are not related in cold markets, but they are negatively related in hot markets in the 1980s, and positively related after 1990. I also find that the average underwriter reputation has increased over time and is negatively related to IPO market activities. Overall, the empirical evidence is consistent with the rational competition hypothesis.; In the study of underpricing, share overhang, and insider selling in follow-on offerings, I empirically test whether owner-managers intentionally offer fewer shares at the time of IPO in order to create informational momentum to sell more shares of their firm and their own shares at higher prices in seasoned offerings. I find that the dilution and insider participation at the time of IPO are negatively related to the frequency and size of seasoned offerings. I also find that the abnormal returns around announcement of seasoned offerings are more negative for newly public firms than for older firms.; The study of the relation between the cycle of seasoned equity offerings and the cycle of initial public offerings investigates whether there is a similar cycle phenomenon in seasoned equity offerings as in initial public offerings, and if so, the relation between these two cycles. I first empirically examine the cycle of seasoned equity offerings and find that there is significant cycle phenomenon, yet not as profound as that of IPOs. I also investigate the effect of economic factors on these two cycles and find many common to both cycles. However, consistent with previous studies, the timing issue is most important for seasoned equity offerings; information asymmetry and investment opportunities also explain IPO cycles in addition to timing.