NDLI: The choice between public offering and private placement: New insights from Chinese data

Content Provider	IEEE Xplore Digital Library
Author	He Li-mei Yu Wei-xi
Copyright Year	2009
Description	Author affiliation: School of Economics and Management, North China University of Technology, China, 100144 (He Li-mei; Yu Wei-xi)
Abstract	We develop and test a logistic regression model to examine how companies choose between public offering and private placements in China. Three findings emerge. First, profitability is one of the most important factors that influence on the choices of SEO. Companies that cannot make enough profits without qualifications for public offering are more likely to choose private placement. This evidence indicates that the choice of SEO in China is most influenced by relevant regulations and that listed companies have equity financing preference. Second, the impact of information asymmetry and the pressure of demand for fund are also important factors. Small companies tend to reduce the risk of issue failure; Companies with high debt ratio tend to meet the demands for fund. Finally, control benefit is another factor which influences the ways of SEO. Block holders with higher initial stakes are under little risk of losing their control power. So they tend to choose private placement, especially to new institutional investors instead of current investors.
Starting Page	1395
Ending Page	1402
File Size	208944
Page Count	8
File Format	PDF
ISBN	9781424439706
DOI	10.1109/ICMSE.2009.5317964
Language	English
Publisher	Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Publisher Date	2009-09-14
Publisher Place	Russia
Access Restriction	Subscribed
Rights Holder	Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Subject Keyword	profitability Costs private placement Profitability public offerings Companies Conference management Data engineering control benefit Security Technology management Engineering management Asia information asymmetry Monitoring
Content Type	Text
Resource Type	Article

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