Convertible Bonds and Firm Value: Evidence from China and Beyond

Po Li (), Tingting Que (), Jing Xie and Yuxiang Zhong ()
Additional contact information
Po Li: University of Macau
Tingting Que: University of Macau
Yuxiang Zhong: Huazhong University of Science and Technology

No 202522, Working Papers from University of Macau, Faculty of Business Administration

Abstract: Analyzing data on convertible bond issuances by Chinese firms, this study demonstrates that firms issuing convertible bonds achieve significantly higher market value compared to their counterparts. To mitigate endogeneity concerns, we utilize matching procedures and leverage the 2017 regulatory reform, which exogenously increased convertible bond issuances in China. Our analysis of the underlying mechanisms reveals that the positive effect of convertible bond issuance on firm value is primarily driven by the enhancement of the firm’s investment efficiency. The positive impact on firm value is particularly pronounced among firms with foreign investors, better corporate governance and more transparent information environments. In addition, we extend our analyses to international settings and provide consistent worldwide evidence that convertible bond issuance has significantly positive effect on firm value.

Keywords: Convertible; bonds; ·; Firm; value; ·; Information; environment (search for similar items in EconPapers)
JEL-codes: C32 C51 C52 E5 E52 E58 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2025-03
References: Add references at CitEc
Citations:

Published in UM-FBA Working Paper Series

Downloads: (external link)
https://fba.um.edu.mo/wp-content/uploads/RePEc/doc/202522.pdf (application/pdf)

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:boa:wpaper:202522

Access Statistics for this paper

More papers in Working Papers from University of Macau, Faculty of Business Administration Contact information at EDIRC.
Bibliographic data for series maintained by Carla Leong ().