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Article: Connected transactions and firm value: Evidence from China-affiliated companies

TitleConnected transactions and firm value: Evidence from China-affiliated companies
Authors
KeywordsCorporate Governance
Firm Value
Related Party Transaction
Tunneling
Issue Date2011
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/pacfin
Citation
Pacific Basin Finance Journal, 2011, v. 19 n. 5, p. 470-490 How to Cite?
AbstractThis paper investigates tunneling through related-party transactions (RPT) using a unique dataset of listed Chinese companies in Hong Kong. While prior findings suggest that investors do not seem to systematically discount tunneling firms, we find that firm value (Tobin's q and market-to-book value) is significantly lower for firms undertaking potentially expropriating transactions. In addition, cumulative abnormal returns (CAR) are lower for RPTs with disclosure exemptions and are negatively related to some RPT types. Our results suggest that firms tunnel using RPTs with disclosure exemptions and that disclosure requirements matter for RPTs. These RPTs could signal firms' corporate-governance quality, as investors substantially discount firms that undertake potentially expropriating transactions. © 2011 Elsevier B.V.
Persistent Identifierhttp://hdl.handle.net/10722/177788
ISSN
2015 Impact Factor: 0.938
2015 SCImago Journal Rankings: 0.541
SSRN
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorLei, ACHen_US
dc.contributor.authorSong, FMen_US
dc.date.accessioned2012-12-19T09:39:54Z-
dc.date.available2012-12-19T09:39:54Z-
dc.date.issued2011en_US
dc.identifier.citationPacific Basin Finance Journal, 2011, v. 19 n. 5, p. 470-490en_US
dc.identifier.issn0927-538Xen_US
dc.identifier.urihttp://hdl.handle.net/10722/177788-
dc.description.abstractThis paper investigates tunneling through related-party transactions (RPT) using a unique dataset of listed Chinese companies in Hong Kong. While prior findings suggest that investors do not seem to systematically discount tunneling firms, we find that firm value (Tobin's q and market-to-book value) is significantly lower for firms undertaking potentially expropriating transactions. In addition, cumulative abnormal returns (CAR) are lower for RPTs with disclosure exemptions and are negatively related to some RPT types. Our results suggest that firms tunnel using RPTs with disclosure exemptions and that disclosure requirements matter for RPTs. These RPTs could signal firms' corporate-governance quality, as investors substantially discount firms that undertake potentially expropriating transactions. © 2011 Elsevier B.V.en_US
dc.languageengen_US
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/pacfinen_US
dc.relation.ispartofPacific Basin Finance Journalen_US
dc.subjectCorporate Governanceen_US
dc.subjectFirm Valueen_US
dc.subjectRelated Party Transactionen_US
dc.subjectTunnelingen_US
dc.titleConnected transactions and firm value: Evidence from China-affiliated companiesen_US
dc.typeArticleen_US
dc.identifier.emailSong, FM: fmsong@hkucc.hku.hken_US
dc.identifier.authoritySong, FM=rp01095en_US
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.1016/j.pacfin.2011.07.002en_US
dc.identifier.scopuseid_2-s2.0-79961104970en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-79961104970&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume19en_US
dc.identifier.issue5en_US
dc.identifier.spage470en_US
dc.identifier.epage490en_US
dc.identifier.isiWOS:000295435200002-
dc.publisher.placeNetherlandsen_US
dc.identifier.ssrn2200784-
dc.identifier.scopusauthoridLei, ACH=45661682900en_US
dc.identifier.scopusauthoridSong, FM=7203075605en_US
dc.identifier.citeulike9629234-

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