Heterogeneity of Institutional Investors with Oriented Add-Issuance and Corporate Performance: Empirical Evidences from China’s Listed Companies

Abstract

Abstract: This paper takes the A-share listed companies that have issued directional additional shares during the period of 2006-2013 as samples to study the impact of different types of institutional investors on the performance of companies that have issued oriented additional new shares from both theoretical and empirical aspects. The findings show that compared with companies that issued non-directional additional shares, the directional additional new shares that brought in the institutional investors can significantly improve the corporate performance. Further studies by distinguishing the nature of institutional investors and their investment target indicates that this positive effect is mainly reflected on the related institutional investors and the strategic institutional investors. Further research shows that the role of strategic institutional investors in promoting the performance of the oriented additional share issuing companies is more obvious in state-owned enterprises; while the impact of financial institutional investors on the performance of the oriented additional share issuing companies is not significant either in state-owned enterprises or private enterprises. The conclusion of this paper can provide a reference for the companies issuing oriented additional new shares to choose the issuing targets and for institutional investors to choose the investment targets.

Key words: oriented add-issuance, strategic investors, financial investors, buy-and-hold return, corporate performance

CLC Number:

F821

ZHANG Wei-dong, LI Hao-ran, YAN Xiang, LUO Xi. Heterogeneity of Institutional Investors with Oriented Add-Issuance and Corporate Performance: Empirical Evidences from China’s Listed Companies[J]. Contemporary Finance & Economics, 2020, 0(2): 89-100.

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