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Algorithmic Trading And Changes In Firms Equity Capital, Ekkehart Boehmer, Kingsley Fong, Julie Wu
Algorithmic Trading And Changes In Firms Equity Capital, Ekkehart Boehmer, Kingsley Fong, Julie Wu
Research Collection Lee Kong Chian School Of Business
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.