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dc.contributor.authorLiu, Jiaen
dc.contributor.authorAkbar, Saeeden
dc.contributor.authorShah, Syed Zulfiqar Alien
dc.contributor.authorZhang, Dayongen
dc.contributor.authorPang, Dongen
dc.date.accessioned2017-01-09T13:45:14Z
dc.date.available2017-01-09T13:45:14Z
dc.date.issued2016-06-27
dc.identifier.citationLiu J., Akbar S., Shah S., Zhang D., Pang D. (2016) 'Market reaction to seasoned offerings in China', Journal of Business Finance and Accounting, 43, pp.597-653.en
dc.identifier.issn0306-686X
dc.identifier.doi10.1111/jbfa.12198
dc.identifier.urihttp://hdl.handle.net/10547/621937
dc.description.abstractThis study examines stock market reaction to the announcement of various forms of seasoned issues in China. Our empirical evidence demonstrates that market reactions differ in ways that suggest a difference between management's internal assessment and the market's assessment of the stock price. The market responds unfavourably to the announcement, notably in the case of rights issues and also with regard to open offers. Private placements experience an unfavourable pre-announcement reaction, which contrasts with the favourable reaction after the event. Convertible bond issues generate positive excess returns consistent with the market's confidence that they can help to align management and shareholders’ interests. Further investigation shows that market reaction is related to factors specific to the issuer and issue by reference to the period immediately surrounding the issue. Specifically, ownership concentration, agency matters connected with equity offerings, investor protection connected with fund allocation and security pricing, and the influence of powerful moneyed interests together provide an instructive insight into market reaction. Institutional inefficiency pertaining to underwriting, auditing, analysts’ forecasts and credit ratings are found to have a weak association with market price, consistent with due public scepticism concerning management and their gatekeepers.
dc.language.isoenen
dc.publisherBlackwell Publishing Ltden
dc.relation.urlhttp://doi.wiley.com/10.1111/jbfa.12198en
dc.rightsYellow - can archive pre-print (ie pre-refereeing)
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/*
dc.subjectseasoned issuesen
dc.subjectG12en
dc.subjectconvertible bond issuesen
dc.subjectseasoned equity offeringsen
dc.subjectmarket infrastructureen
dc.subjectG14en
dc.subjectG30en
dc.subjectinformation asymmetryen
dc.subjectagency costsen
dc.subjectmarket reactionen
dc.subjectG32en
dc.subjectinformationen
dc.subjectChinaen
dc.subjectN120 International Business studiesen
dc.titleMarket reaction to seasoned offerings in Chinaen
dc.typeArticleen
dc.contributor.departmentUniversity of Salforden
dc.contributor.departmentUniversity of Liverpoolen
dc.contributor.departmentUniversity of Warwicken
dc.contributor.departmentSouthwestern University of Finance and Economics, Chinaen
dc.contributor.departmentUniversity of Bedfordshireen
dc.identifier.journalJournal of Business Finance and Accountingen
dc.date.updated2017-01-09T11:59:54Z
html.description.abstractThis study examines stock market reaction to the announcement of various forms of seasoned issues in China. Our empirical evidence demonstrates that market reactions differ in ways that suggest a difference between management's internal assessment and the market's assessment of the stock price. The market responds unfavourably to the announcement, notably in the case of rights issues and also with regard to open offers. Private placements experience an unfavourable pre-announcement reaction, which contrasts with the favourable reaction after the event. Convertible bond issues generate positive excess returns consistent with the market's confidence that they can help to align management and shareholders’ interests. Further investigation shows that market reaction is related to factors specific to the issuer and issue by reference to the period immediately surrounding the issue. Specifically, ownership concentration, agency matters connected with equity offerings, investor protection connected with fund allocation and security pricing, and the influence of powerful moneyed interests together provide an instructive insight into market reaction. Institutional inefficiency pertaining to underwriting, auditing, analysts’ forecasts and credit ratings are found to have a weak association with market price, consistent with due public scepticism concerning management and their gatekeepers.


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