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Doctoral Dissertation Template UNIVERSITY OF OKLAHOMA GRADUATE COLLEGE ESSAYS IN CHINESE SECURITY ISSUANCE AND PRIVATIZATION A DISSERTATION SUBMITTED TO THE GRADUATE FACULTY in partial fulfillment of the requirements for the Degree of DOCTOR OF PHILOSOPHY By XUECHEN GAO Norman, Oklahoma 2017 ESSAYS IN CHINESE SECURITY ISSUANCE AND PRIVATIZATION A DISSERTATION APPROVED FOR THE MICHAEL F. PRICE COLLEGE OF BUSINESS BY ______________________________ Dr. William Megginson, Chair ______________________________ Dr. Georgia Kosmopoulou ______________________________ Dr. Duane Stock ______________________________ Dr. Pradeep Yadav ______________________________ Dr. Caroline Zhu © Copyright by XUECHEN GAO 2017 All Rights Reserved. For my mom. Thank you for everything. Acknowledgements I am extremely grateful to William Megginson for his guidance and mentorship throughout the doctoral program, and for chairing my dissertation committee. I am appreciative to Veljko Fotak, William Megginson, and Weici Yuan for the opportunity to collaborate on research over the past five years. I would also like to thank Georgia Kosmopoulou, Duane Stock, Pradeep Yadav, and Caroline Zhu for their commitment and advice as members of my dissertation committee. iv Table of Contents Acknowledgements ......................................................................................................... iv List of Tables .................................................................................................................. vii List of Figures .................................................................................................................. ix Abstract ............................................................................................................................. x Chapter 1: Types of Government Ownership and Post-Privatization Performance: Evidence from Chinese Private Placement Privatizations .................................... 1 1. Introduction ............................................................................................................ 1 2. Hypotheses ........................................................................................................... 10 3. Data and Methodology ......................................................................................... 13 4. Results .................................................................................................................. 17 4.1. Covariates Balance Check ........................................................................... 18 4.2. Comparisons of Market Reactions .............................................................. 18 4.3. Comparisons of Performance Improvements .............................................. 20 4.4. Robustness check ......................................................................................... 24 4.4.1 Regression analysis ................................................................................... 24 4.4.2 Propensity Score Matching ........................................................................ 26 4.5. SASAC supervised CGOEs versus LGOEs ................................................ 27 5. Conclusion ............................................................................................................ 29 Chapter 2: Changing Chinese Share-Issue Privatization Listing Strategies ................... 31 1. Introduction .......................................................................................................... 31 2. Data and Observations .......................................................................................... 38 3. Hypotheses ........................................................................................................... 40 v 4. Methodology ......................................................................................................... 43 5. Results .................................................................................................................. 47 6. Conclusion ............................................................................................................ 53 Chapter 3: The Choice of Flotation Methods: Evidence from Chinese Seasoned Equity Offerings ............................................................................................................. 55 1. Introduction .......................................................................................................... 55 2. Introduction of Equity Flotation Methods in China ............................................. 64 3. Hypotheses ........................................................................................................... 66 3.1. Information Asymmetry Hypothesis ........................................................... 66 3.2. Ownership Structure Hypothesis ................................................................. 68 3.3. Listing Requirement Hypothesis ................................................................. 70 4. Data and Methodologies ....................................................................................... 71 5. Results .................................................................................................................. 74 5.1. Valuation effects of three equity flotation methods .................................... 74 5.2. Cross-sectional regression results ................................................................ 76 5.3. Multinomial logistic regression results ....................................................... 77 6. Conclusion ............................................................................................................ 80 References ...................................................................................................................... 82 Appendix A: Tables and Figures .................................................................................... 89 vi List of Tables Table 1. Sample Distribution by Year ............................................................................ 89 Table 2. Covariates Balance Check ................................................................................ 90 Table 3. Comparison of Market Reactions to Private Placement Privatizations ............ 91 Table 4. Post-Privatization Performance Changes ......................................................... 92 Table 5. Comparison of Post-Privatization Performance Changes ................................ 93 Table 6. Regression Analysis on the Different Impacts between Central and Local Government Ownerships ................................................................................................ 94 Table 7. Comparison of Post-Privatization Performance Changes by Propensity Score Matching ......................................................................................................................... 95 Table 8. Comparison of Post-Privatization Performance Changes between SASAC Supervised CGOEs and LGOEs ..................................................................................... 96 Table 9. Statistical Description of the Whole Share-Issue Privatization Sample ........... 97 Table 10. Capital Raised by H-share Companies ........................................................... 98 Table 11. Chinese A-Share Market Values and Annual Average AC Ratios ................ 99 Table 12. Probability of Overseas Listing Determined From Probit Models ............... 100 Table 13. Probit Model with Instrumental Variable ..................................................... 101 Table 14. Comparison of Overseas Listing Probabilities Using Propensity Score Matching Technique ..................................................................................................... 102 Table 15. Test the Overseas Listing Probability Change of Chinese SOEs with Probit Models .......................................................................................................................... 103 Table 16. Statistical Description of the Chinese Private-Owned Firm Sample ........... 104 vii Table 17. Test the Overseas Listing Probability Change of Chinese Private Firms with Probit Models ............................................................................................................... 105 Table 18. Listing strategy patterns between Chinese SOEs and private firms ............. 106 Table 19. Comparison of Three Flotation Methods in China ....................................... 107 Table 20. Descriptions of Major Variables .................................................................. 110 Table 21. Descriptive Statistics of Relevant Variables ................................................ 111 Table 22. Valuation Effects of Three Flotation Methods ............................................. 112 Table 23. Cross-sectional Regressions for CARs for Private placements .................... 113 Table 24. Marginal Effects on the Choice of Equity Flotation Methods ..................... 114 Table 25. Univariate Analysis of Monitoring ............................................................... 115 viii List of Figures Figure 1. Shanghai Stock Exchange Market Data ........................................................ 116 Figure 2. Percentage Domestic Issuance for State-Owned and Private-Owned Enterprises .................................................................................................................... 118 Figure 3. Comparison of Three Flotation Methods in China ....................................... 119 ix Abstract
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