Convertible bond announcement effects: Why is Japan different?

Marie Dutordoir, Hui Li, Frank Hong Liu, Patrick Verwijmeren (Corresponding Author)

Research output: Contribution to journalArticlepeer-review

13 Citations (Scopus)


U.S. and Japanese firms dominate global convertible bond issuance. Previous research documents more favorable convertible bond announcement effects in Japan than in the U.S. and other developed countries. Using a global sample of convertible bonds issued from 1982 to 2012, we find that the more favorable announcement effects of Japanese convertibles are driven by their stated uses of proceeds. Japanese convertibles more often include capital expenditure as an intended use, while U.S. firms tend to mention general purposes to motivate their offering. Our findings illustrate the value to firms of being more explicit when disclosing the intended use of proceeds of security offerings.
Original languageEnglish
Pages (from-to)76-92
Number of pages17
JournalJournal of Corporate Finance
Early online date22 Dec 2015
Publication statusPublished - Apr 2016

Bibliographical note

We would like to thank an anonymous referee, Craig Lewis, Yoichi Otsubo, Jay Ritter, Norman Strong, and Chris Veld, as well as the participants at the Asset Pricing and Corporate Finance Workshop at the University of Glasgow in 2013 and the World Finance Conference at Buenos Aires in 2015, for their very helpful comments and suggestions. We would also like to thank Hamza Ghaffar and Mats van Marle for providing excellent research assistance.


  • convertible bonds
  • capital expenditure
  • disclosure standards
  • Japan
  • stated use of proceeds


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