Do IPOs Performance Signal Future Stock Issuance

45 Pages Posted: 16 Aug 2014 Last revised: 16 May 2018

See all articles by Dimitrios Gounopoulos

Dimitrios Gounopoulos

University of Bath

Yilmaz Guney

University of Hull

Jingsi Leng

Hull University Business School (HUBS)

Date Written: May 13, 2018

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, Do IPOs Performance Signal Future Stock Issuance (May 13, 2018). Available at SSRN: https://ssrn.com/abstract=2480820 or http://dx.doi.org/10.2139/ssrn.2480820

Dimitrios Gounopoulos (Contact Author)

University of Bath ( email )

School of Management,
Wessex House, Claverton Down
Bath, BA2 7AY
United Kingdom

Yilmaz Guney

University of Hull ( email )

Hull, HU6 7RX
United Kingdom

HOME PAGE: http://https://www.hull.ac.uk/faculties/fblp/hubs.aspx

Jingsi Leng

Hull University Business School (HUBS) ( email )

Hull, HU6 7RX
United Kingdom

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