Bond Offerings in China

37 Pages Posted: 5 Jun 2018

See all articles by Paul-Olivier Klein

Paul-Olivier Klein

University of Aberdeen Business School; University of Strasbourg

Laurent Weill

University of Strasbourg - LaRGE Research Center (Laboratoire de Recherche en Gestion et Economie)

Date Written: July 2018

Abstract

This study appraises the value created by a bond offering in China, where high levels of state ownership and insider ownership raise concerns about the use of the proceeds. To estimate the impact of a bond issue on the firm's value, we apply an event‐study methodology on a sample of 481 issues of 347 Chinese companies over the period 2009–2013. It turns out that state ownership has a positive impact on the value of a bond offering for shareholders, which is consistent with an implicit guarantee of the issue by the state. For privately owned companies, insider ownership exerts a nonlinear impact on the firm's value, supporting an aligning effect in the use of the proceeds. Overall, the study confirms the key role of ownership structure in Chinese firms.

Keywords: China, ownership, corporate bonds

Suggested Citation

Klein, Paul-Olivier and Weill, Laurent, Bond Offerings in China (July 2018). Economics of Transition, Vol. 26, Issue 3, pp. 363-399, 2018, Available at SSRN: https://ssrn.com/abstract=3190746 or http://dx.doi.org/10.1111/ecot.12150

Paul-Olivier Klein (Contact Author)

University of Aberdeen Business School ( email )

Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

University of Strasbourg ( email )

61, avenue de la foret noire
Strasbourg, Alsace 3000
France

Laurent Weill

University of Strasbourg - LaRGE Research Center (Laboratoire de Recherche en Gestion et Economie) ( email )

61 Avenue de la Forêt Noire
F-67085 Strasbourg Cedex
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
200
PlumX Metrics