TY - JOUR
T1 - Effects of regulator's announcements, information asymmetry and ownership changes on private equity placements: evidence from China
AU - Fonseka, M M
AU - Colombage, Sisira Reginold Nishantha
AU - Tian, Gao-Liang
PY - 2014
Y1 - 2014
N2 - In response to the China Securities Regulatory Commission s regulation of private equity placements (PEP) in 2006, this study investigates the impact of the announcements of PEP applications, withdrawals, rejections, approvals, and completions on the returns of the firms that issue private equity (PE) and the factors that influence market reactions to these announcements. The results show that issuing firms experience stock price responses only to the announcements of PE applications, approvals, and completions. The announcement effect is positively related to the market discount, proceeds from private placements, and private institutional buying and ownership changes; and negatively related to government or government institutional buying and changes in the ownership of management buyers.
AB - In response to the China Securities Regulatory Commission s regulation of private equity placements (PEP) in 2006, this study investigates the impact of the announcements of PEP applications, withdrawals, rejections, approvals, and completions on the returns of the firms that issue private equity (PE) and the factors that influence market reactions to these announcements. The results show that issuing firms experience stock price responses only to the announcements of PE applications, approvals, and completions. The announcement effect is positively related to the market discount, proceeds from private placements, and private institutional buying and ownership changes; and negatively related to government or government institutional buying and changes in the ownership of management buyers.
UR - http://www.sciencedirect.com/science/article/pii/S1042443113001017
U2 - 10.1016/j.intfin.2013.11.008
DO - 10.1016/j.intfin.2013.11.008
M3 - Article
SN - 1042-4431
VL - 29
SP - 126
EP - 149
JO - Journal of International Financial Markets, Institutions and Money
JF - Journal of International Financial Markets, Institutions and Money
IS - 1
ER -