Tunneling, propping, and expropriation: evidence from connected party transactions in Hong Kong

• 成果类型: Article
• 署名作者: Cheung, Yan-Leung; Rau, P. Raghavendra; Stouraitis, Aris
• 署名单位: Purdue University System; Purdue University; City University of Hong Kong
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2004.08.012
• 发表日期: 2006
• 页码: 343-386
• 关键词: international corporate governance; Legal systems; EXPROPRIATION; connected transactions; Pyramids; Tunneling; propping

摘要

We examine a sample of connected transactions between Hong Kong listed companies and their controlling shareholders. We address three questions: What types of connected transactions lead to expropriation of minority shareholders? Which firms are more likely to expropriate? Does the market anticipate the expropriation by firms? On average, firms announcing connected transactions earn significant negative excess returns, significantly lower than firms announcing similar arm's length transactions. We find limited evidence that firms undertaking connected transactions trade at discounted valuations prior to the expropriation, suggesting that investors cannot predict expropriation and revalue firms only when expropriation does occur. (c) 2006 Elsevier B.V. All rights reserved.