Kling, Gerhard and Gao, Lei
Equity transfers and market reactions: Evidence from Chinese stock markets
Journal of Emerging Market Finance, 7, (3), . (doi:10.1177/097265270800700304).
Our logit models explain positive or negative short–term market reactions due to equity transfers in China. In contrast to former studies, we classify transfers into private transactions, privatisations, transfers among state–owned enterprises (SOEs) and nationalisations. We control for uncompensated transactions, transfers of holding rights, replacements of the CEO and related party transactions. Privatisations trig–ger positive responses, whereas nationalisations cause declining stock prices. The market appreciates reforms in the state–owned sector if reorganisations include the transfer of holding rights and not just replacing the CEO. Uncompensated transfers and non–transparent transactions of related parties diminish gains for minority shareholder
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