Blockholding and market reactions to equity offerings in China

William Cheung, Keith S.K. Lam, Lewis H.K. Tam*

*この研究の対応する著者

研究成果: Article査読

9 被引用数 (Scopus)

抄録

We examine the impact of blockholding on shareholders' wealth in equity offerings in China. We find that investors generally react negatively to equity-offering announcements by firms with high blockholding. A one-standard-deviation (12%) increase in blockholding leads to a 0.59% reduction in firm valuation over a seven-day window and a 5.50% reduction over a 2-year period surrounding the announcement. Private (non-governmental) blockholding is associated with a more negative valuation effect than governmental blockholding over the long-term event window. The above result holds only for financially constrained firms but not unconstrained firms. Further analysis shows that firms with private blockholding have greater positive cash-cash flow sensitivity than firms with governmental blockholding, and again, the result holds for financial constrained firms only. Collectively, the findings suggest that equity offerings in China signal the issuers' future financial constraints, but the findings do not support the agency hypothesis of state ownership.

本文言語English
ページ(範囲)459-482
ページ数24
ジャーナルPacific Basin Finance Journal
20
3
DOI
出版ステータスPublished - 2012 6
外部発表はい

ASJC Scopus subject areas

  • 財務
  • 経済学、計量経済学

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