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ABSTRACT: China's B-share market, which used to be restricted to foreign investors, was partially opened up in February 2001 to Chinese local investors. We take this as a controlled experiment in cross-border trading on a small scale. We find mild but positive effects on the B-share market, with higher volumes, lower levels of volatility, lower bid-ask spreads and more liquidity after liberalization. Between A- and B-shares, price disparities narrowed; the correlation and the co-integration relationships became stronger; and the flow of information became more balanced. More new individual investors entered into the B-share market without crowding out existing institutional investors. Even though the liberalization measure is partial and one-way, it has helped to improve the quality of the B-share market, and our results lend no support to the popular claim that liberalization does nothing but help the existing foreign shareholders to cash out.
Journal of Empirical Finance 01/2009; 16(1):18-41. · 0.84 Impact Factor
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ABSTRACT: We study the partial privatization of 53 Chinese state-owned enterprises (by their listings on the Hong Kong Exchange over the period July 1993 to December 2002. We find that listing has led to a median increase of 70% in real net profits, 80% in real sales, 50% in capital spending, and a mild but nonsignificant improvement in coverage ratios, but no improvement in return on sales and a significant underperformance of returns against several market index benchmarks. Further investigation shows that firm performance is negatively related to state ownership, but positively related to legal-personal ownership and foreign ownership.
Financial Management 08/2005; 34(3):5 - 30. · 1.36 Impact Factor
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Journal of Banking & Finance. 02/2003; 27(6):1111-1121.
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Journal of Financial Economics 02/2003; 70(2):183-222. · 3.72 Impact Factor
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ABSTRACT: We link up the findings of Abraham and Ikenberry (1994) and Wang, Li and Erickson (1997) by showing that negative Monday returns concentrate on days 18 to 26 of a month and they can be completely explained in the statistical sense by the negative returns on the previous Friday. More importantly, we observe a 'week-four effect'. Not only the returns on Mondays but also returns on other days are lower during the fourth week of a month. We suggest that liquidity selling by individual investors may be the reason. Copyright Blackwell Publishers Ltd 2002.
Journal of Business Finance & Accounting 02/2002; 29(7&8):1123-1147. · 0.69 Impact Factor
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Pacific-Basin Finance Journal 02/2002; 10(3):333-351. · 0.55 Impact Factor
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ABSTRACT: The effect of government ownership on firm performance remains a controversial issue, especially in a transitional economy like China. Government ownership is typically viewed as adversely affecting firm performance. This study of that of Mainland China's privatization experience indicates the opposite. No matter whether it is in the form of state ownership or legal person ownership, government ownership has a positive impact on partially privatized state-owned enterprises. However, this relationship is nonlinear and shows an inverted U-shape. Given the situation of highly indebted, non-performing state-owned enterprises, we argue that too much government control is indeed bad for enterprises. But too little government ownership may not be good either. It might mean a lack of the government's political support and business connections, which are valuable and necessary to vitalize performance. Copyright Blackwell Publishers Ltd 2002.
Journal of Business Finance & Accounting 02/2002; 29(1&2):1-27. · 0.69 Impact Factor
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ABSTRACT: As the first comprehensive study on privatization in Malaysia, this paper compares financial and operating performance of a sample of 24 firms before and after privatization. The 24 firms were privatized via public listing on the Malaysian exchange -. Measures that improve following privatization include profitability, output level, and dividend payout; leverage declines. We also observe increased linkages between ownership and corporate governance with such performance changes. By and large, our results are similar to the results of the directly comparable multi-country studies of Megginson, Nash, and van Randenborgh (1994), Boubakri and Cosset (1998), and D’Souza and Megginson (1999).
Financial Management. 01/2002; 31(4).
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Journal of Banking & Finance. 02/2000; 24(12):1875-1902.
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ABSTRACT: The existing literature on the trade news effect on asset prices generally looks at exchange rates and stock market indexes. We focus on individual stocks: the U.S. and Japanese "Big Three" automobile stocks. First, we examine Japanese automobile ADRs, not the stocks per se, to avoid the time-lag problem. Deficit news shocks, especially the positive shocks, are found to have a negative impact on the Japanese automobile ADRs. Second, we find only weak evidence that news effect is different under different economic conditions. Third, trade news is shown to be a competitive shock to the automakers in the sense of Karolyi and Stulz (1996). Last, statistically generated U.S.-Japan bilateral trade deficit news and bilateral auto trade deficit news have no effect on the automobile stock in general.
Journal of Financial Research. 01/2000; 23(1):15-43.
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ABSTRACT: Existing literature on trade news effect on asset prices generally looks at exchange rates and stock market indices. This paper focuses on individual stocks--the U.S. and Japanese "Big Three" automobile stocks. This study makes several contributions. First, it examines Japanese automobile ADRs, not the stocks per se, to avoid the time-lag problem. Deficit news shocks, especially the positive shocks, is found to have a negative impact on the Japanese automobile ADRs. Second, the paper finds only weak evidence on McQueen and Roley's (1993) suggestion that news impact is different under different economic conditions. Last, trade news is shown to be a competetive shock to the automakers in the sense of Karolyi and Stulz (1996).
Capital Markets: Asset Pricing & Valuation eJournal. 07/1999;
