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- Title
Does consideration matter to China's split share structure reform?
- Authors
Lu, Fei; Balatbat, Maria; Czernkowski, Robert
- Abstract
We investigate the share market response to China's split share structure reform and find average negative daily return around the government announcement on 29 April 2005. However, there is a turnaround at individual companies' decision to implement the reform where we find positive and significant average daily return, contingent on the type of consideration. We attribute this change in market sentiment to the company's announcement that the reform will involve the payment of consideration to holders of tradable A-shares. Our results also show that holders of tradable A-shares earn significant abnormal daily returns when companies propose to pay in cash or warrants or combine any of these payment methods with bonus shares.
- Subjects
CHINA; MARKET share; RATE of return; DECISION making; PAYMENT; INDUSTRIAL organization (Economic theory)
- Publication
Accounting & Finance, 2012, Vol 52, Issue 2, p439
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/j.1467-629X.2011.00400.x