2003
DOI: 10.2139/ssrn.458541
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The Behavior of China's Stock Prices in Response to the Proposal and Approval of Bonus Issues

Abstract: Event study analysis is applied to investigate stock price reaction to the announcement of bonus issues for the emerging stock markets of China. Results show that the issues with a high bonus ratio (number of bonus shares in the issue/number of existing shares) usually attract positive returns for both Chinese (A-share traders) and foreign (B-share traders) residents. Issues with a low bonus ratio are rewarded with negative returns for A-share traders and do not stimulate significant activity by B-share trader… Show more

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Cited by 16 publications
(15 citation statements)
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“… See, for example, Grinblatt et al (1984) and Rankine and Stice (1997) for the US evidence. Similar market reactions are also detected in other markets such as Australia, Canada, China, Denmark, Germany, Greece, Hong Kong, India, Japan, Korea and Switzerland (e.g., Balachandran et al, 2004; Kryzanowski and Hao, 1991; Barnes and Ma, 2004; Bechmann and Raaballe, 2007; Wulff, 2002; Leledakis et al, 2009; Papaioannou et al, 2000; Wu and Chan, 1997; Lukose and Rao, 2002; Kato and Tsay, 2002; Dhatt et al, 1997; and Kunz and Rosa‐Majhensek, 2008). …”
supporting
confidence: 68%
See 1 more Smart Citation
“… See, for example, Grinblatt et al (1984) and Rankine and Stice (1997) for the US evidence. Similar market reactions are also detected in other markets such as Australia, Canada, China, Denmark, Germany, Greece, Hong Kong, India, Japan, Korea and Switzerland (e.g., Balachandran et al, 2004; Kryzanowski and Hao, 1991; Barnes and Ma, 2004; Bechmann and Raaballe, 2007; Wulff, 2002; Leledakis et al, 2009; Papaioannou et al, 2000; Wu and Chan, 1997; Lukose and Rao, 2002; Kato and Tsay, 2002; Dhatt et al, 1997; and Kunz and Rosa‐Majhensek, 2008). …”
supporting
confidence: 68%
“…Overall, the aggregate average of BDR of 175% is substantially higher than the averages in other markets such as 100% in India, 69% in Greece, 30% in China, 18% in Australia, 11% in US, and 9% in Japan. However, our average BDR is lower than 245% for stock dividends in Denmark, with similar market settings and motivations as in Turkey (Lukose and Rao, 2002; Papaioannou et al, 2000; Barnes and Ma, 2004; Balachandran et al, 2004; Lakonishok and Lev, 1987; Kato and Tsay, 2002; and Bechmann and Raaballe, 2007).…”
Section: Resultsmentioning
confidence: 49%
“…Firstly, this is a simple, straight-forward and widely used model (Agrawal, Kishore & Rao 2006;Altman, Gande & Saunders 2004;Barnes & Ma 2001;Brown 1999;Charitou, Vafeas & Zachariades 2005;Gao & Tse 2004;Jones & Danbolt 2004;Soongswang 2007;Travlos, Trigeorgis & Vafeas 2001). Secondly, many studies (Agrawal et al 2006;Altman et al 2004;Barnes & Ma 2001;Charitou et al 2005;Gao & Tse 2004;Kang et al 1995;Soongswang 2007;Travlos et al 2001) have shown that results obtained from market-adjusted returns model and other models, such as the market model and mean adjusted returns model, do not exhibit significant differences. Brown andWarner (1980, 1985) also confirm that event studies based on both the market model and the market-adjusted returns model indicate that the two models are equally as powerful in detecting abnormal returns.…”
Section: Estimation Of Equity Returnmentioning
confidence: 96%
“…The analysis reveals a significant decline in the market-adjusted trading volume in the post dividend period. Barnes and Ma (2002) investigated the reaction of stock price to the announcement of bonus issue for Chinese stock market. The announcements with high bonus ratio lead to significantly positive return for both Chinese as well as foreign traders.…”
Section: Foreign Research Studies Related To Bonus Issues Announcementsmentioning
confidence: 99%