The impact of governmental intervention on the association between initial public offering and future stock issuance

Dimitrios Gounopoulos, Yilmaz Guney, Jingsi Leng, Viktoria Patsika

Research output: Contribution to journalArticle


We examine the effect of initial public offering (IPO) characteristics on seasoned equity offering (SEO) decisions in relation to governmental intervention in China. Our results confirm the process of underpriced IPOs in promoting earlier and larger SEOs in the Chinese context. The study examines three channels through which the Chinese government intervenes in equity issuance activities, namely state ownership, politically connected executives and economic development areas. We find that the connection between IPOs and SEOs becomes less apparent in government‐intervened firms. We attribute these results to the conflict between the state and minority shareholders, which leads to high uncertainty and risk in government‐intervened firms.
Original languageEnglish
JournalBritish Journal of Management
Early online date9 Mar 2020
Publication statusE-pub ahead of print - 9 Mar 2020

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