Bond offerings in China

Paul-Olivier Klein () and Laurent Weill
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Paul-Olivier Klein: LARGE - Laboratoire de recherche en gestion et économie - UNISTRA - Université de Strasbourg - L'europe en mutation : histoire, droit, économie et identités culturelles - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique

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Abstract: This study appraises the value created by a bond offering in China, where high levels of state-ownership and insider-ownership raise concerns in the use of the proceeds. To estimate the impact of a bond issue on the firm's value, we apply an event-study methodology on a sample of 481 issues of 347 Chinese companies over the period 2009–2013. It turns out that state-ownership has a positive impact on the value of a bond offering for shareholders, which is consistent with an implicit guarantee of the issue by the state. For privately-owned companies, insider-ownership exerts a non-linear impact on the firm's value, supporting an aligning effect in the use of the proceeds. Overall, the study confirms the key role of ownership structure in Chinese firms.

Date: 2018-04-03
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Published in Economics of Transition, 2018, 26 (3), pp.363-399. ⟨10.1111/ecot.12150⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03053250

DOI: 10.1111/ecot.12150

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