Optimal Disclosure and Litigation Rules Around IPOs and SEOs

Bayar, Onur; Chemmanur, Thomas J.; Fulghieri, Paolo

doi:10.2139/ssrn.3076684

Cited by 1 publication

(1 citation statement)

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“…However, the financial environment influences boundedly investors in interpreting information indicated by issuers (Park and Patel, 2015). Bayar, Chemmanur and Fulghieri (2019), in a study examining the optimal disclosure around IPOs and SEOs, document that equity offering prices are affected by various rules governing disclosure around equity issues. The Chinese capital market is criticized for severe asymmetric information, agency conflicts and opaque disclosure (Bruton et al ., 2015; McGuinness, 2018).…”

Section: Introductionmentioning

confidence: 99%

The Impact of Governmental Intervention on the Association Between Initial Public Offering and Future Stock Issuance

Gounopoulos

Gűney

Leng

et al. 2020

British J of Management

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We examine the effect of initial public offering (IPO) characteristics on seasoned equity offering (SEO) decisions in relation to governmental intervention in China. Our results confirm the process of underpriced IPOs in promoting earlier and larger IPOs in the Chinese context. The study examines three channels through which the Chinese government intervenes in equity issuance activities named state ownership, politically connected executives and economic development areas. We find that the connection between IPOs and SEOs becomes less apparent in government-intervened firms. We attribute our results to the conflict between the state and minority shareholders, which leads to high uncertainty and risk in government-intervened firms.

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