Block trade targets in China

Liping Dong, Konari Uchida, Xiaohong Hou

研究成果: Contribution to journalArticle査読

4 被引用数 (Scopus)

抄録

We examine characteristics associated with the probability of Chinese companies being block trade targets. We find that the proportion of non-publicly tradable shares over total outstanding shares is positively related to the probability of firms being block trade targets before the split-share structure reform. Ownership concentration, director ownership, and firm size were negatively related to the frequency of firms being block trade targets during the pre-reform period. Pre-reform firms with high free cash flow were likely to be block trade targets, and bidders paid a high premium to acquire those companies. The cost of a block trade increased significantly after the split-share structure reform, and the frequency of block trades declined considerably. These results suggest that before the reform Chinese bidders mainly pursued private benefits of control rather than capital gains from value-increasing takeovers. After the reform, bidders have bought tradable shares and paid a negative premium, suggesting that being a blockholder in Chinese companies implies costs that exceed benefits.

本文言語英語
ページ(範囲)188-201
ページ数14
ジャーナルJournal of Corporate Finance
25
DOI
出版ステータス出版済み - 4 2014

All Science Journal Classification (ASJC) codes

  • ビジネスおよび国際経営
  • 財務
  • 経済学、計量経済学
  • 戦略と経営

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