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The impact of governmental intervention on the association between initial public offering and future stock issuance
journal contributionposted on 2020-08-03, 08:47 authored by Dimitrios Gounopoulos, Yilmaz Guney, Jingsi LengJingsi Leng, Victoria Patsika
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 SEOs in the Chinese context. The study examines three channels through which the Chinese government intervenes in equity issuance activities, namely 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 these results to the conflict between the state and minority shareholders, which leads to high uncertainty and risk in government‐intervened firms.
- Business and Economics
Published inBritish Journal of Management
Pages665 - 687
PublisherJohn Wiley & Sons Ltd
- AM (Accepted Manuscript)
Rights holder© British Academy of Management
Publisher statementThis is the peer reviewed version of the following article: GOUNOPOULOS, D. ... et al, 2020. The impact of governmental intervention on the association between initial public offering and future stock issuance. British Journal of Management, 31 (4), pp.665-687, which has been published in final form at https://doi.org/10.1111/1467-8551.12400. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.