Research on the Economic Consequences of Listed Company Rights Issues

Author: Yuan Hongqi
Publisher:
Publish Date: 2004-06-01
Features: The content of this book is exploratory and forward-looking. It is the first to systematically analyze the dynamic game between the government and enterprises to assess the impact of rights offerings by the government. It is the first to compare the advantages and disadvantages of different methods of earnings management in a quantitative manner. It is the first to examine the long-term return performance and accounting performance of companies after rights offerings. It is the first to study the rights offering behavior of major shareholders and its economic consequences. It is believed that the publication of this book will help regulate the behavior of regulatory authorities, investors, and listed company intermediaries. The research findings of this book show:
1. The evolution of rights offering policies is the result of the dynamic game between enterprises and the government. Under the regulation of accounting earnings indicators, enterprises have strong incentives and behaviors to manipulate profits.
2. Listed companies engage in earnings management to qualify for rights offerings.
3. After rights offerings, the performance of companies shows a long-term deterioration trend compared to the overall market performance.
4. Different rights offering behaviors of major shareholders lead to different economic consequences.