China’s Securities reforms and IPO wealth loss

Chalmers, Keryn; Haman, Janto; Qu, Wen

doi:10.1016/j.jcae.2014.08.002

Cited by 9 publications

(3 citation statements)

References 48 publications

(65 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Thus, a greater or lesser degree of interest from state shareholders reflects a firm's risk tolerance (Sharma et al, 2020). Thus, state ownership plays a significant role in listed firms in emerging markets such as China (Chalmers et al, 2014; Tian & Estrin, 2008) and the Russian market (Liljeblom et al, 2019). In Vietnam, the government views state‐owned firms as economic engines and prioritizes certain resources overseen by the Viet Nam Committee for Management of State Capital, such as oil, gas, coal, and minerals, which assist corporations expand (OECD, 2021).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

The moderating role of state ownership in between product market competition and firm value: findings from GMM and fsQCA

Thu

Minh

2022

Bus Strat Dev

View full text Add to dashboard Cite

The study explores the link between product market competition (PMC) and firm value (FV) and examines the moderating role of the state ownership (SOE) variable in this relationship by using data from 555 listed firms on Vietnam's stock market from 2011 to 2019 on the Ho Chi Minh Stock Exchange (HOSE) and Ha Noi Stock Exchange (HNX). The System Generalized Method of Moments (SysGMM) is used to consider the relationship between variables. The findings from SysGMM indicate that product market competition has an effect on firm value. Firms with a high proportion of state ownership have a stronger correlation between product market competition and firm value than firms with a low proportion of state ownership. Additionally, we use fuzzy-set qualitative comparative analysis (fsQCA) to consider the causal relationship of variables in the model. The fsQCA results show that FV increased when the combination of lower product market competition, higher state ownership, higher firm, and lower debt ratio, which is a common trend to help clarify the evidence in emerging markets. The research is significant for investors, listed companies, and particularly organizations with state ownership, since it enables them to develop specific strategies for enhancing corporate value as the competitive market grows more challenging. Simultaneously, the study concentrated on examining the causal relationships between the variables while utilizing the FSQCA approach in order to contribute to the literature review in the emerging market.

show abstract

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

The moderating role of state ownership in between product market competition and firm value: findings from GMM and fsQCA

Thu

Minh

2022

Bus Strat Dev

View full text Add to dashboard Cite

show abstract

“…The Chinese Government aims to improve the efficiency of state-owned enterprises through the transition to a socialist market economy with more competitive product markets. SOEs remains widespread in Chinese listed firms (Tian and Estrin, 2008;Chalmers et al, 2014). Over the years, the role played by SOEs in listed Chinese firms has been described as either a "grabbing hand" (when SOEs facilitates the expropriation behavior through tunneling) (Chen et al, 2014) or a "helping hand" (when it provides listed firms priority for state-controlled resources thus assists firms to achieve better performance) (Qian, 2003;Tian and Estrin, 2008;Blanchard and Shleifer, 2001;You and Du, 2012).…”

Section: Introductionmentioning

confidence: 99%

Product market competition, state-ownership, corporate governance and firm performance

Liu

Haman

2018

ARA

Self Cite

View full text Add to dashboard Cite

Purpose The purpose of this paper is to examine the association between firm performance and product market competition (PMC), and then examine the mitigation effect of corporate governance and/or state-ownership (SOEs) in the association between PMC and firm performance using Chinese listed firms. Design/methodology/approach The authors consider three determinants of the PMC that affect the nature of competition, and use market concentration, product substitutability and market size as proxies for PMC. The authors construct a corporate governance index which measures the extent of board independence, monitoring strength of supervisory board over board of directors, and monitoring strength of board of directors over CEO. The authors use Tobin’s Q as a proxy for firm performance. The authors use a sample of 20,706 firm-year observations listed on the Chinese stock market between 2001 and 2016 to empirically investigate the research questions proposed in the paper. Findings The authors find that higher PMC is associated with lower firm performance. The authors find that good corporate governance practices moderate the negative effect of higher PMC on firm performance. The association between higher PMC and lower performance is weaker for firms controlled by SOEs compared to non-SOEs. Further, the moderation effect of SOEs on the association between higher PMC and lower performance is more pronounced for firms with good corporate governance practices compared to firms with weak corporate governance practices. Originality/value Extant studies investigating the relationship between PMC and corporate governance suggest an either complementary or substitution relationship in developed economies. Our study highlights the interactive role played by SOEs and good corporate governance practices in firm performance in highly competitive product markets in an emerging economy. The findings provide insightful information to regulators of other emerging countries that SOEs with good corporate governance practices can play an important role in the economy by mitigating the negative effect of higher PMC on firm performance.

show abstract

“…Cheung et al (2009) studied the effect of regulatory changes on the underpricing of A-shares IPOs and concluded that the new regulations made the IPO market more market-oriented and significantly reduced underpricing. Chalmers et al (2014) studied the effect of financial market regulatory changes on IPO performance in China, using Habib and Ljungqvist's (2001) wealth loss measure, and concluded that the regulatory changes reduced the wealth loss of the pre-IPO owners who are more actively involved in the IPO pricing. Their findings also suggest that a higher proportion of independent executives on the board of directors mitigates the wealth loss and that there is a positive relationship between state ownership and the wealth loss associated with an IPO.…”

Section: These Reforms Led To the Adoption Of New Financial Rules Andmentioning

confidence: 99%

Initial public offerings in China: Underpricing, statistics and developing literature

Azevedo

Gűney

Leng

2018

Research in International Business and Finance

View full text Add to dashboard Cite

We review more than two decades of literature on initial public offerings (IPOs) in China, discussing the research hypotheses that have been studied as well as the main findings. We summarize past and current developments in the literature and highlight the research problems which have not yet been adequately resolved. We provide updated information on the popularity of IPOs and allocation mechanisms over the last 25 years as well as on the underpricing that is associated with the usage of each IPO allocation mechanism. We also suggest new avenues for future research, based on the identified gaps in the extant literature.

show abstract

China’s Securities reforms and IPO wealth loss

Cited by 9 publications

References 48 publications

The moderating role of state ownership in between product market competition and firm value: findings from GMM and fsQCA

The moderating role of state ownership in between product market competition and firm value: findings from GMM and fsQCA

Product market competition, state-ownership, corporate governance and firm performance

Initial public offerings in China: Underpricing, statistics and developing literature

Contact Info

Product

Resources

About