Download Free The Bonding Effect In Cross Listed Chinese Companies Book in PDF and EPUB Free Download. You can read online The Bonding Effect In Cross Listed Chinese Companies and write the review.

A common explanation offered for PRC companies' listing overseas is that they receive a price premium because listing overseas demonstrates a willingness to submit to the more shareholder-protective regulatory regime of the foreign jurisdiction and stock market. This explanation is commonly known as the bonding hypothesis. There is some empirical support for the proposition that listing overseas does indeed bring a price premium, although issues of causality are difficult to sort out. If it is true that investors view an overseas listing of a Chinese firm as something worth paying a premium for, the question remains, however, as to whether that view is well founded. Investors in overseas markets may find themselves left out in the cold when things go wrong, and indeed the Risk Factors section of PRC firms' IPO prospectuses routinely caution investors that successfully suing the company or its management will be difficult or impossible. This paper will examine the degree to which Chinese listed companies and their management do in fact, in a practical and realistic way, bind themselves to overseas state and market norms when such companies list abroad. It will argue that the actual binding effect of an overseas listing is small and that investors are mistaken to pay a premium for it. This conclusion, if correct, has at least two important implications beyond China. First, it casts into doubt the semi-strong form of the efficient capital markets hypothesis, because it means that there is publicly available information that does not seem to be adequately incorporated into stock prices. Second, it suggests that the bonding hypothesis needs to be examined on an empirical, country-by-country basis to see whether the bonding is in fact anything more than an illusion.
The purpose of this thesis is to examine the effects of overseas cross-listing on Chinese companies’ dividend policy and to present evidence on the prevalence of the bonding theory. We believe that by cross-listing, Chinese companies bond themselves to a well-developed capital market with a more stringent legislation environment and therefore facilitate the improvement of their corporate governance. We hypothesize that cross-listing has a positive effect on the corporate governance, which results in a higher propensity of dividend payments. We collect data on all dual-listed and multiple-listed Chinese companies listed on the Hong Kong stock exchange, Singapore stock exchange, NYSE, or NASDAQ from 1993 to 2014. We use two samples to conduct the analyses: a full sample covering all cross-listed and non-cross-listed Chinese public firms, and a subsample containing all the cross-listed firms with their propensity score-matched non-cross-listed firms. The results for the full sample indicate more dividends per share, a higher dividend payout ratio, and a higher likelihood to pay cash dividends in cross-listed firms, while the results for the matched sample only suggests a higher dividend payout ratio in cross-listed firms compared to their counterparts. The results also reveal that Chinese cross-listed companies pay more dividends to overseas investors than domestic investors and the issuance of the Corporate Governance Code in 2002 improved corporate governance in Chinese companies.
While many nations are still struggling from the global financial crisis and regaining their financial security, investors are considering alternative options for investing their money; and the secure financial sector is China appears as a viable option. International Cross-Listing of Chinese Firms examines the successful techniques and strategies that Chinese companies are using within their financial practices. It highlights the foreign-based multinational enterprise theories related to the major international stock markets. By providing the latest theories and research, this book will be beneficial for business practitioners, researchers, and managers interested in the relationship between cross-listing and firm valuation of Chinese firms.
This book assembles the world's most authoritative specialists for a comparative analysis of the enforcement of corporate and securities laws in thirteen national jurisdictions. It examines the enforcement of corporate and securities laws across the globe and across different legal and political systems from an in-depth comparative perspective.
"Efficient Market Hypothesis has always been a hot topic for empirical study in Finance. In this paper, we examine the efficiencies of Mainland China and Hong Kong markets by analyzing the different reactions of stock price and volatility to credit rating changes. The study of impact of credit rating change also fills a gap of no empirical analysis of credit rating change effect in these two markets. In a semi-strong efficient market, investors cannot make profit based on public information. In this study, we select Chinese cross-listed A-H share companies as our sample and compare the effects of bond rating changes on A-share stock price and H-share stock price. The differences in the stock return and volatility reactions signify the differences in market efficiency. The results from an event study indicate that neither market is semi-strong efficient and Hong Kong market is more efficient in digesting credit rating change information. Both Mainland China and Hong Kong markets show statistically significant and negative abnormal returns after the announcement of credit rating downgrades and only Mainland China market shows statistically significant abnormal returns before the announcement. Hong Kong market shows statistically significant and positive abnormal returns around the announcement of credit rating upgrades and Mainland China market shows no statistically significant abnormal returns around the announcement. Concerning volatility, credit rating downgrades can cause significant positive abnormal volatility around the announcement date in both Mainland China and Hong Kong markets, while there is no significant abnormal volatility around the announcement of credit rating upgrades. In the cross-sectional analysis of return reactions to credit rating changes, pre-announcement abnormal returns and whether credit ratings moved to speculative grade have an impact on the abnormal returns during the announcement."--Author's abstract.
Although "good" companies have incentives to signal their types by listing in the strict regulatory environment of the US, there have been an unprecedented number of recent accounting frauds by US-listed Chinese companies. We argue that the traditional bonding argument failed for US-listed Chinese companies due to a lack of audit quality and audit firm oversight. We find: 1) that US-listed Chinese companies were more likely than US-listed companies from other countries to avoid hiring high quality annually-inspected US audit firms, and 2) that investors reacted negatively to news that US regulators would be unable to provide oversight of Chinese auditors.
Listing by companies from one country on the stock market of another country is a device often used both to raise capital in, and to increase bonding with, the target country. This book examines the listing by Chinese companies on the Hong Kong stock market. It discusses the extent of the phenomenon, compares the two different regulatory regimes, and explores the motivations for the cross-listing. It argues that a key factor, in addition to raising capital and bonding with the Hong Kong market, is Chinese companies’ desire to encourage legal and regulatory reforms along Hong Kong lines in mainland China, in order to develop and open up China’s domestic capital markets.
China operates as the planet's second largest economy and its fastest growing economic superpower. "Betting on China" suggests a new prism through which to view China's rise, present-day workings, and future prospects in the global economy: stocks; more specifically: the stocks of China-operating companies that are listed on the major U.S. stock markets of NASDAQ and the New York Stock Exchange. It is through the mechanics of the bets placed on Chinese companies in these equity exchanges-the largest and most liquid in the world and open to investors across the planet-that real insight into the workings of China and of its economy are generated and played out in real time.