Using 665 rights offerings of Chinese firms, we demonstrate positive but diminishing price effects of successive announcements at the board meeting, the shareholders' meeting, the prospectus release date, and the ex-rights date, but negative abnormal returns before the ex-rights date. Public investors value the participation from shareholders of state and legal-person shares in the rights offerings, which seem to be linked to the future firm performance. The results overall supports the hypothesis that Chinese company earnings are considerably manipulated in the rights issue process.
|Number of pages||28|
|Journal||Journal of International Financial Management and Accounting|
|Publication status||Published - Jun 2008|
ASJC Scopus subject areas
- Business, Management and Accounting (miscellaneous)