Going private transactions by U.S.-Listed Chinese companies: What drives the premiums paid?

Chen, Yea-Mow; Huang, Ying Sophie; Wang, David K.; Wu, Chun-Chou

doi:10.1016/j.iref.2014.01.008

Cited by 5 publications

(1 citation statement)

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“…The results also imply that there may be mispricing of Chinese companies in U.S. markets. Compared to other companies in different countries, Chinese companies are often undervalued on foreign exchanges (Chen et al, 2014). A primary factor for this is the perceived risk of the Chinese government passing legislation that causes stock prices to fall.…”

Section: Discussionmentioning

confidence: 99%

Effects of Chinese Stock Market Policies on Chinese Stocks Listed in the United States

Radkov¹,

Tipping²

2022

J Stud Res

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Chinese stock market policies have shown to increase stock volatility on domestic Chinese stock exchanges (Wang et al, 2017). However, little research has been conducted on the effects of Chinese stock market policy on Chinese stocks listed on U.S. exchanges. It was hypothesized that Chinese stock market policies had a major effect on Chinese stocks listed on U.S. stock exchanges. Key dates on which Chinese stock market policies were passed were studied to see if there was a relationship to Chinese stocks in U.S. markets. The list of policies was sourced from Wang and associates. A list of Chinese stocks that listed on U.S. exchanges before January 2021 was acquired from the U.S.-China Economic and Security Review Commission. Percentage change was analyzed for Chinese stocks one week, one month, and six months after a Chinese stock market policy was passed. Percentages were then averaged and compared to the mean percent movement of the iShares Russell 1000 ETF (Ticker $IWB) for the same time periods. A two-sample t-test was conducted on the average percent movements of the three categories of Chinese companies and $IWB. Since all P values were above the accepted alpha value of 0.05, it was concluded that there was no significant difference between Chinese companies and $IWB for all three time periods analyzed in the study. This suggests that there is no causal relationship between Chinese stock market policies and the price of Chinese stocks on U.S. stock exchanges.

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Section: Discussionmentioning

confidence: 99%