The Impact of Foreign Strategic and Corporate Investors on H-Share IPO Performance

Paul Brockman; Louis T.W. Cheng; Tak Y. Leung

doi:10.1111/ajfs.12156

The Impact of Foreign Strategic and Corporate Investors on H-Share IPO Performance

Paul Brockman, Louis T.W. Cheng, Tak Y. Leung

Hong Kong Metropolitan University

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

Abstract

Since 1993, foreign institutional investors (strategic and corporate) have been permitted to invest in Chinese companies listed in Hong Kong as H-shares. We examine the impact of strategic and corporate investors on H-shares before, during, and after their IPOs. We observe that strategic and corporate investors select their investment candidates based on specific pre-IPO firm characteristics. The certification effect of corporate investors generates a significantly positive effect on outside investor demand. In addition, the presence of foreign institutional investors, particularly strategic investors, and post-IPO performance are positively related. Overall, we document a positive effect of foreign institutional investors on H-firms.

Original language	English
Pages (from-to)	886-915
Number of pages	30
Journal	Asia-Pacific Journal of Financial Studies
Volume	45
Issue number	6
DOIs	https://doi.org/10.1111/ajfs.12156
Publication status	Published - 1 Dec 2016

Keywords

Corporate investor
Foreign institutional investor
H-shares
IPO
Strategic investor

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10.1111/ajfs.12156

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title = "The Impact of Foreign Strategic and Corporate Investors on H-Share IPO Performance",

abstract = "Since 1993, foreign institutional investors (strategic and corporate) have been permitted to invest in Chinese companies listed in Hong Kong as H-shares. We examine the impact of strategic and corporate investors on H-shares before, during, and after their IPOs. We observe that strategic and corporate investors select their investment candidates based on specific pre-IPO firm characteristics. The certification effect of corporate investors generates a significantly positive effect on outside investor demand. In addition, the presence of foreign institutional investors, particularly strategic investors, and post-IPO performance are positively related. Overall, we document a positive effect of foreign institutional investors on H-firms.",

keywords = "Corporate investor, Foreign institutional investor, H-shares, IPO, Strategic investor",

author = "Paul Brockman and Cheng, {Louis T.W.} and Leung, {Tak Y.}",

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N2 - Since 1993, foreign institutional investors (strategic and corporate) have been permitted to invest in Chinese companies listed in Hong Kong as H-shares. We examine the impact of strategic and corporate investors on H-shares before, during, and after their IPOs. We observe that strategic and corporate investors select their investment candidates based on specific pre-IPO firm characteristics. The certification effect of corporate investors generates a significantly positive effect on outside investor demand. In addition, the presence of foreign institutional investors, particularly strategic investors, and post-IPO performance are positively related. Overall, we document a positive effect of foreign institutional investors on H-firms.

AB - Since 1993, foreign institutional investors (strategic and corporate) have been permitted to invest in Chinese companies listed in Hong Kong as H-shares. We examine the impact of strategic and corporate investors on H-shares before, during, and after their IPOs. We observe that strategic and corporate investors select their investment candidates based on specific pre-IPO firm characteristics. The certification effect of corporate investors generates a significantly positive effect on outside investor demand. In addition, the presence of foreign institutional investors, particularly strategic investors, and post-IPO performance are positively related. Overall, we document a positive effect of foreign institutional investors on H-firms.

KW - Corporate investor

KW - Foreign institutional investor

KW - H-shares

KW - IPO

KW - Strategic investor

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M3 - Article

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EP - 915

JO - Asia-Pacific Journal of Financial Studies

JF - Asia-Pacific Journal of Financial Studies

IS - 6

ER -

The Impact of Foreign Strategic and Corporate Investors on H-Share IPO Performance

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Keywords

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