Market Timing with Security Offering Regulations: Evidence from Private Placements of Chinese Listed Firms

Lihong Cao, Xinping Xia and Yixia Wang

Emerging Markets Finance and Trade, 2013, vol. 49, issue S2, 91-106

Abstract: In the context of China's strict security-offering regulations, we examine market timing by linking firms' decisions to withdraw private placement (PP) proposals to changes in market condition during the approval process. We reveal that timing based on the strictness of the security-offering regulations is as important a dimension of market timing as timing based on the issuers' market valuations is. A firm's probability of withdrawing its PP proposal is negatively related to changes in its market-to-book ratio and changes in the strictness of regulations, measured by changes in the issue market (hot/cold) occurring between proposal announcement and outcome day. PPs for investment financing have more pronounced timing effects than PPs for asset restructuring.

Keywords: market timing; private placements; security-offering regulations; withdrawal (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://mesharpe.metapress.com/link.asp?target=contribution&id=J5N734Q658H48017 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:49:y:2013:i:s2:p:91-106

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().