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157th Biweekly Academic Forum

作者:     日期:2015-11-24    来源:

1. Topic: Market Regulation and Private Equity Placements in China

2. Lecturer: Gu Ming, assistant professor of Hanqing School of Economics and Finance of Renmin University and PhD in Finance in Rutgers University. His research field includes market anomaly, earnings management, corporate governance and China capital market. He used to introduce his research achievements in famous academic meetings such as AFA and EFA. Dr. Gu teaches Asset Pricing and Portfolio for graduates in Renmin University.

3. Time: November, 27th, 2015(Friday), 12:30-13:30

4. Place: Lecture Hall Room 606

5. Host: Gou Qin, Lecturer of School of Finance, Central University of Economics and Finance

Abstract: The appropriate level of regulation of equity public offerings and issuing firms’ commitment to oversight reduce information asymmetry and hence mispricing. Yet for private equity placements (PEPs), the question remains unanswered whether extensive regulatory control is necessary to prevent abuse and enhance firm value. Compared with those in Western countries, PEPs in China are heavily regulated. Therefore, we are interested whether the findings about PEPs from developed financial markets still hold in underdeveloped but highly state-controlled markets like China, and whether a more stringent regulation has an impact, good or bad, on market participants. We find that PEP-issuing firms in China perform better than non-issuing firms in the long run. General investors benefit more from private placements when controlling shareholders participate in the deals, and long-term returns to controlling shareholders outperform those to non-controlling shareholders.