The Impact of Governmental Intervention on the Association Between Initial Public Offering and Future Stock Issuance

Gounopoulos, D., Guney, Y., Leng, J. and Patsika, V. (2020). The impact of governmental intervention on the association between initial public offering and future stock issuance. British Journal of Management, Forthcoming.

51 Pages Posted: 8 Feb 2020

See all articles by Dimitrios Gounopoulos

Dimitrios Gounopoulos

University of Bath

Yilmaz Guney

Coventry University

Jingsi Leng

Hull University Business School (HUBS)

Victoria Patsika

Cardiff University

Date Written: January 15, 2020

Abstract

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 IPOs in the Chinese context. The study examines three channels through which the Chinese government intervenes in equity issuance activities named 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 our results to the conflict between the state and minority shareholders, which leads to high uncertainty and risk in government-intervened firms.

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

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 Offering and Future Stock Issuance (January 15, 2020). Gounopoulos, D., Guney, Y., Leng, J. and Patsika, V. (2020). The impact of governmental intervention on the association between initial public offering and future stock issuance. British Journal of Management, Forthcoming., Available at SSRN: https://ssrn.com/abstract=3519826

Dimitrios Gounopoulos

University of Bath ( email )

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

Yilmaz Guney (Contact Author)

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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
27
Abstract Views
132
PlumX Metrics