The life cycle of initial public offering companies : a panel analysis of Chinese listed companies

Li, D 2010, The life cycle of initial public offering companies : a panel analysis of Chinese listed companies , PhD thesis, Salford : University of Salford.

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Abstract

Many prior studies have been devoted to the performance of Chinese listed companies over the last 20 years, however they have largely neglected what influence the transition of the post-IPO companies. This thesis reports on one of the first empirical attempts to investigate what factors influence the post-issue transition of Chinese initial public offering (IPO) companies into one of the post-IPO states over the life cycle of the company. These can be represented by either healthy state, get acquired, or delisting outright. Also, a company has strong (S-M&A) or weak performance (W-M&A) prior becoming acquisition target. Using panel data from 1998 to 2008, this research constructs measures for a large number of factors for all publicly listed companies on the Chinese stock market, particularly examines the impact of agency costs, board characteristics and ultimate ownership. With logistic regressions, this research shows that the probability of the W-M&A and delisting states goes up as agency costs increase, which indicates that agency costs are responsible for non-healthy post-IPO status. Of the board characteristics variables, higher board independence exists in healthy companies compared to acquired and delisted companies. This suggests that board independence is associated with the incidence of transition to healthy post-IPO state. CEO duality and board size do not appear to be significant determinants. Furthermore, state ultimate-controlled companies are more likely to get into both M&A states, implying that the state ownership has become one of the most important factor in determining the M&A transactions. However the state ultimate ownership deters companies from delisting. The results display significant evidence that the ultimate ownership is important for transition to the post-IPO states. Besides, this research points out that high-technology, great pre-IPO operating performance, large IPO offering size and low IPO initial returns are accountable for survival in the after-market.

Item Type:	Thesis (PhD)
Contributors:	Liu, J (Supervisor)
Schools:	Schools > Salford Business School
Depositing User:	Institutional Repository
Date Deposited:	03 Oct 2012 13:34
Last Modified:	04 Aug 2022 11:25
URI:	https://usir.salford.ac.uk/id/eprint/26773

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