We examine the effect of initial public offering (IPO) characteristics on seasoned equity offering (SEO) decisions in relation to governmental intervention in China. Our results confirm the process of underpriced IPOs in promoting earlier and larger SEOs in the Chinese context. The study examines three channels through which the Chinese government intervenes in equity issuance activities, namely state ownership, politically connected executives and economic development areas. We find that the connection between IPOs and SEOs becomes less apparent in government‐intervened firms. We attribute these results to the conflict between the state and minority shareholders, which leads to high uncertainty and risk in government‐intervened firms.
ASJC Scopus subject areas
- Business, Management and Accounting(all)
- Strategy and Management
- Management of Technology and Innovation
Guney, Y., Gounopoulos, D., Leng, J., & Patsika, V. (2020). The impact of governmental intervention on the association between initial public offering and future stock issuance. British Journal of Management, (In-press), (In-press). https://doi.org/10.1111/1467-8551.12400