Earticle

초록

영어

We find that both investment and compensation policies become less efficient following seasoned equity offerings. During the year of SEO and the following year, the shareholder return-to-investment sensitivity decreases, the likelihood of overinvestment increases, and acquisition announcement returns decrease. At the same time, top officers’ and directors’ compensation increases, their pay-for-performance sensitivity decreases, and firm value decreases. These post-SEO changes are significantly related to investor reactions at the time of SEO announcements. Our results are based on publicly-listed Chinese firms over the period 2000 to 2012, which experienced exogenous regulatory shocks on the eligibility to issue SEOs. The shocks allow construction of instruments to address endogeneity issues. Our findings imply that SEO proceeds, on average, are used unproductively for shareholders and provide private benefits to management.

목차

Abstract
 I. INTRODUCTION
 II. SEASONED EQUITY OFFERINGS IN CHINA
  II.1 General Background
  II.2 Regulatory Changes on Chinese SEOs
 III. DATA
  III.1 Sample Description
  III.2.Definition of Key Variables
  III.3. Summary Statistics
 IV. EFFICIENCY CHANGES FOLLOWING SEOS
  IV.1. Investment Efficiency
  IV.2. Director and Officer Compensation Following SEOs
  IV.3. Firm Performance during SEO years
  IV.4. Underwritten Offering vs. Rights Offerings
  IV.5. Robustness
 V. SEO ANNOUNCEMENT RETURNS AND INVESTMENT AND COMPENSATION EFFICIENCY
  V.1. Uni-variate Analyses
  V.2. Multivariate Analyses
 VI. CONCLUSION
 References
 Table
 Appendices

키워드

저자

• E. Han Kim [ Everett E. Berg Professor of Finance at the University of Michigan, Ross School of Business, Ann Arbor, Michigan 48109 ]
• Heuijung Kim [ A doctoral candidate at Sungkyunkwan University, SKK Business School, Seoul, Korea ]
• Yuan Li [ A graduate student at Tsinghua University School of Economics and Management, Beijing, China ]
• Yao Lu [ Associate Professor of Finance at Tsinghua University School of Economics and Management, Beijing, China ]

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  한국재무학회 학술대회

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