Reform of non-tradable shares and Equity in China
Date Issued
2006
Date
2006
Author(s)
Tsai, Pei-Wen
DOI
en-US
Abstract
The study investigates the effect of the reform of non-tradable shares in China. It is divided into three parts. In the first section, the multiple linear regression method is used to investigate the factors which affect the amount of the compensation. The result is that the amount of compensation is affected by the ratio of non-tradable shares, ROE and the percentage of tradable shares held by mutual funds. Second, the “Event Study” method is used to investigate the effect of the prices in the process of the reform. The result appears the prices increase after the announcement of the compensation but decrease after the shareholders meeting. This phenomenon can be explained by two reasons. First one is the disappearance of the expectation of the compensation. Second one is the price pressure hypothesis. When the number of outstanding shares increases, the price decreases. In the third section, we find that the compensation is fair to tradable shareholders.
Subjects
股權分置改革
事件研究法
價格壓力假說
reform of non-tradable shares
event study
price pressure hypothesis
Type
thesis
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