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Bond offerings in China

Author

Listed:
  • 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)

  • Laurent Weill

    (LARGE - Laboratoire de Recherche en Gestion et Economie - UNISTRA - Université de Strasbourg)

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.

Suggested Citation

  • Paul-Olivier Klein & Laurent Weill, 2018. "Bond offerings in China," Post-Print hal-03053250, HAL.
    • Handle: RePEc:hal:journl:hal-03053250
    DOI: 10.1111/ecot.12150
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    Cited by:

    1. Jeon, Chunmi & Han, Seung Hun & Kim, Hyeong Joon & Kim, Sangsoo, 2022. "The effect of government 5G policies on telecommunication operators’ firm value: Evidence from China," Telecommunications Policy, Elsevier, vol. 46(2).
    2. Huang, Xiaoyong & Yu, Cong & Chen, Yunping & Jia, Fei & Xu, Xiangyun, 2022. "Rigid payment breaking, default spread and yields of Chinese treasury bonds," The North American Journal of Economics and Finance, Elsevier, vol. 59(C).
    3. Feng, Xunan & Johansson, Anders C., 2018. "Firm Ownership, Political Participation, and Access to Finance through Public Bond Offerings in China," Stockholm School of Economics Asia Working Paper Series 2018-50, Stockholm School of Economics, Stockholm China Economic Research Institute.

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