재무연구 제 권 호 (2018년 5월)
Asian Review of Financial Research, Vol., No..
pp.1011~1035
pp.1011~1035
Effects of Employee and Executive Stock Ownerships in Chinese IPO Market on Short-term and Long-term Performances
Tae-Ho Yang School of Business Administration, Kyungpook National University, South Korea
Sung-Hwan Kim School of Business Administration, Kyungpook National University, South Korea
This paper examines the effects of employee and executive stock ownership, particularly focusing on initial returns and long-term returns, on the stock market performances of Chinese firms. We used IPO and stock market data of 1,370 IPO firms that went public through Shenzhen and Shanghai Stock Exchanges from 2003 to 2015. We find that the initial returns and long-term returns are lower for firms with both employee and executive stock ownership, than those without prior to and subsequent to IPOs. However, long-term CARs are higher for firms with executive stock ownership around the IPOs. Our results basically contradict the results of other studies for the case of ESOPs, which support insiders' motives for positive effect on prodcutivity, compensation stock market. For the case of executive ownership around the IPOs, the hypothesis of Lowry and Murphy (2006) who propose that top managers can influence offer prices for higher underpricing. Our results reject a general view of ESOP and executive as a tool to control asymmetric information and improve productivity with higher stock market returns.
Tae-Ho Yang
Sung-Hwan Kim
This paper examines the effects of employee and executive stock ownership, particularly focusing on initial returns and long-term returns, on the stock market performances of Chinese firms. We used IPO and stock market data of 1,370 IPO firms that went public through Shenzhen and Shanghai Stock Exchanges from 2003 to 2015. We find that the initial returns and long-term returns are lower for firms with both employee and executive stock ownership, than those without prior to and subsequent to IPOs. However, long-term CARs are higher for firms with executive stock ownership around the IPOs. Our results basically contradict the results of other studies for the case of ESOPs, which support insiders' motives for positive effect on prodcutivity, compensation stock market. For the case of executive ownership around the IPOs, the hypothesis of Lowry and Murphy (2006) who propose that top managers can influence offer prices for higher underpricing. Our results reject a general view of ESOP and executive as a tool to control asymmetric information and improve productivity with higher stock market returns.
