World Markets for Raising New Capital

Brian J. Henderson, Narasimhan Jegadeesh, Michael S. Weisbach

NBER Working Paper No. 10225
Issued in January 2004
NBER Program(s):The Corporate Finance Program, The International Finance and Macroeconomics Program

Financial markets are increasingly integrated globally. We examine the extent to which firms from different countries rely on alternative sources of capital, the locations where they raise capital, and the factors that affect these choices. During the 1990-2001 period, firms raised about $25.9 trillion of new capital, including $4.7 trillion from abroad. International debt issuances are substantially more common than equity, accounting for over 90% of the international security issues, and about 20% of all public debt issues. In contrast, international equity issues account for about 4.4% of all international security issues, and about 6% of all equity issues during our sample period. Market timing considerations appear to be very important in security issuance decisions. Firms all around the world are more likely to issue equity prior to periods of low market returns. Most of the cross-border equity is issued in the U.S. and the U.K., and these issues tend to occur in 'hot' markets and prior to relatively low market returns. Finally, firms issue more debt when interest rates are lower, and issue debt overseas when interest rates in the place of issue are lower than they are at home.

download in pdf format
   (620 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w10225

Published: Henderson, Brian J. & Jegadeesh, Narasimhan & Weisbach, Michael S., 2006. "World markets for raising new capital," Journal of Financial Economics, Elsevier, vol. 82(1), pages 63-101, October. citation courtesy of

Users who downloaded this paper also downloaded* these:
Kim and Weisbach w11797 Motivations for Public Equity Offers: An International Perspective
Kim and Weisbach w11197 Do Firms Go Public to Raise Capital?
Gozzi, Levine, and Schmukler w14961 Patterns of International Capital Raisings
Obstfeld w6559 The Global Capital Market: Benefactor or Menace?
Erel, Julio, Kim, and Weisbach w16941 Macroeconomic Conditions and Capital Raising
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us