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The impact of governmental intervention on the association between initial public offering and future stock issuance

Gounopoulos, Dimitrios, Guney, Yilmaz, Leng, Jingsi and Patsika, Victoria 2020. The impact of governmental intervention on the association between initial public offering and future stock issuance. British Journal of Management 10.1111/1467-8551.12400
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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 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.

Item Type: Article
Date Type: Published Online
Status: In Press
Schools: Business (Including Economics)
Publisher: Wiley
ISSN: 1045-3172
Date of First Compliant Deposit: 10 March 2020
Date of Acceptance: 13 January 2020
Last Modified: 09 Jul 2020 11:30
URI: http://orca.cf.ac.uk/id/eprint/130265

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