Institutional Ownership and Private Equity Placements: Evidence from Chinese Listed Firms

Qing He (), Dongxu Li, Liping Lu and Terence Tai Leung Chong

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the impact of institutional ownership on the performance of private equity placements (PEPs) for listed firms in China. We find that the presence of institutional investors can alleviate the information asymmetries between listed firms and the market. The market reaction to PEP announcements is significantly smaller if there is a higher portion of institutional shareholdings. Long-term firm operational performance after PEPs is positively correlated with institutional shareholdings. Moreover, we find that the relationship between institutional shareholdings and PEP performance is mainly driven by non-listed corporate investors and mutual funds. Finally, the relationship between PEP performance and institutional shareholdings is stronger in smaller PEP issuers.

Keywords: Institutional ownership; Private equity placements (PEPs); Information asymmetry; Strategic investor; Liquidity investor (search for similar items in EconPapers)
JEL-codes: G23 G32 G38 K22 (search for similar items in EconPapers)
Date: 2017-12-14
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Institutional Ownership and Private Equity Placements: Evidence from Chinese Listed Firms (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:92035

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