The Impact of governmental intervention on the association between initial public offerings and future stock issuance

British Journal of Management, 31, 2020, pp 665-687

40 Pages Posted: 16 Aug 2014 Last revised: 10 Mar 2021

See all articles by Dimitrios Gounopoulos

Dimitrios Gounopoulos

University of Bath - School of Management

Yilmaz Guney

Coventry University

Jingsi Leng

Hull University Business School (HUBS)

Victoria Patsika

Cardiff University

Date Written: January 15, 2020

Abstract

This study empirically examines the effect of initial public offering (IPO) issuance on seasoned equity offering (SEO) decisions and the impact of state-owned enterprises (SOEs) in China. Results indicate that specific IPO characteristics, corporate governance issues, and firm-specific factors determine the timing and size of an SEO. Findings reveal that a higher level of IPO underpricing leads firms to issue SEOs sooner with larger proceeds. The connections between IPOs and SEOs become less apparent in state-controlled firms. There are two major implications. First, firms can use IPO underpricing to obtain larger SEOs sooner in the presence of asymmetric information. Second, state control interferes with the pattern of firms raising capital from the Chinese stock markets.

Keywords: Initial Public Offerings, Seasoned Equity Offerings, State Owned Enterprises, Governmental Intervention

JEL Classification: G30, G32

Suggested Citation

Gounopoulos, Dimitrios and Guney, Yilmaz and Leng, Jingsi and Patsika, Victoria, The Impact of governmental intervention on the association between initial public offerings and future stock issuance (January 15, 2020). British Journal of Management, 31, 2020, pp 665-687, Available at SSRN: https://ssrn.com/abstract=2480820 or http://dx.doi.org/10.2139/ssrn.2480820

Dimitrios Gounopoulos (Contact Author)

University of Bath - School of Management ( email )

Yilmaz Guney

Coventry University ( email )

Coventry, CV1 5FB
United Kingdom

Jingsi Leng

Hull University Business School (HUBS) ( email )

Hull, HU6 7RX
United Kingdom

Victoria Patsika

Cardiff University ( email )

Aberconway Building
Colum Drive
Cardiff, Wales CF10 3EU
United Kingdom

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
233
Abstract Views
2,388
Rank
237,300
PlumX Metrics