Where Would Refinancing Preferences Go?
We study the relation between the non-tradable shares reform and the refinancing preferences. From the viewpoints of change in market and policy environments led by the reform, we find that right issues dominate before the reform, however, public offerings (including private placement) dominate after reform, which could be attributed to more money encirclement induced by the shift of the public offering mechanism from in discount to in premium after reform and no requirements for large shareholders’ participation commitments in public offerings.
Keywordsnon-tradable shares reform refinancing preferences refinancing
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