Private placement and abnormal corporate payouts: evidence from large stock dividends

Cui, Chenyu; Chen, Yunsen; Zheng, Dengjin

doi:10.1080/21697213.2017.1292717

Cited by 4 publications

(5 citation statements)

References 21 publications

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“…Data was restricted to companies with the legal form of public limited companies, with consolidated financial statements available in the said database (C2 -declaration of the parent company that integrates the declaration of its subsidiaries and affiliates; and U1 -declaration of the company that does not integrate the declaration of possible subsidiaries or affiliates). The sample covered firms from all sectors of activity, excluding those from the financial and insurance sectors, due to the specificities of their accounting rules, in consistency with the research of Cui et al (2017) and Pindado et al (2012). The final sample consists of 612 firms, covering data from the period 2008 to 2019.…”

Section: Population and Samplementioning

confidence: 99%

Determinants of Dividend Payout in Unlisted Spanish Family and Non-Family Firms

Borralho¹,

Duarte²

2022

EJFB

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The present study analyzes dividends paid in unlisted family and non-family businesses, exploring factors that lead to higher or lower dividend payments. Data from 612 Spanish companies during 12 consecutive years was analyzed. This study indicates that family businesses, as a result of the greater proximity of the family to the business, pay lower dividends. However, we found evidence of higher dividends paid in pyramid structures, susceptible to higher agency costs, both in family and non-family businesses. In family businesses, this can be explained by their aim to maintain levels of trust with minority interests, and in non-family businesses by the purpose to mitigate conflicts of interest as a consequence of greater autonomy of subsidiaries. The evidence obtained adds value to the investigation, which has generally been focused on listed companies. Considering that unlisted companies use the dividend policy to align divergent interests, especially in more fragile governance structures, the results contribute to reduce the gap in research, and have practical implications for companies and investors.

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Section: Population and Samplementioning

confidence: 99%

Determinants of Dividend Payout in Unlisted Spanish Family and Non-Family Firms

Borralho¹,

Duarte²

2022

EJFB

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“…Second, existing studies reveal a significant effect of corporate governance on the performance of PPs (Baek et al, 2006;Barclay et al, 2007;Wruck and Wu, 2009;Zhao et al, 2011;Cui et al, 2017;Zhu et al, 2008;Chen et al, 2010). According to the new institutional economics theory, corporate governance is determined by business transactions.…”

Section: Private Placementsmentioning

confidence: 99%

“…Then, it greatly enhances the company's competitive advantages. However, weaknesses in corporate governance have induced the opportunistic behavior of managers or large shareholders in PPs (Zhao et al, 2011;Cui et al, 2017), which extracts resources for future development and impairs the operating performance following PPs (Barclay et al, 2007;Wruck and Wu, 2009;Baek et al, 2006;Cui et al, 2017). In essence, corporate governance is determined by business transactions according to the new institutional economics theory.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…First, the high concentration of customer base has a scale effect on production and sales. Second, customers could constrain the opportunism behavior in PPs through its supervision role (Baek et al, 2006;Barclay et al, 2007;Wruck and Wu, 2009;Zhao et al, 2011;Cui et al, 2017;Zhu et al, 2008;Chen et al, 2010). However, companies may also be ripped off by their customers, which hinders firms from their PP objective.…”

Section: Introductionmentioning

confidence: 99%

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Customer relationship and the operating performance following private placements

Teng

Xia

2021

NBRI

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Purpose Close relationship with major customers, by curtailing opportunistic behaviors during private placements (PPs) and guaranteeing the production and sales of products after, is expected to facilitate the realization of PP’s strategic goals. However, major customers, on the contrary, may impair PP’s performance because of their strong bargaining power. Based on the transaction cost theory and relational contract theory, this paper aims to investigate the impact of major customers on firms’ strategic development in the context of private placements. The mechanisms of such impact are analyzed from the prospect of economies of scale, supervision and the rip-off effect by major customers. Further, the moderating role of the customer relationship investment (CRI) is considered. Design/methodology/approach Using a sample of China’s non-financial A-share listed firms during 2010-2016, this paper empirically investigates the impact of customer relationships on firms’ operating performance following PPs. In the main regressions, the sales growth rate serves as the dependent variable to measure PP’s operating performance, while the customer concentration proxies for the closeness of customer relationship. This study captures the impact of customer relationships on PPs’ performance by looking at the coefficient of the interaction term of post PP dummy and customer concentration. In the additional tests, selling and management expenses along with entertainment and traveling expenditures are used to measure customer relationship investment. Findings Results show that major customers help improve PPs’ strategic performance. The more concentrated the customer portfolio is, the higher operating performance will be after the PPs. Such a relationship is stronger when CRI is at a higher level. However, CRI also incurs costs, which impairs the effect of major customers on net profit. Further research finds that the effect of major customers is more pronounced in situations of extensional PPs, with actively interactive customers and in non-state-owned firms. In addition, state-owned customers with strong bargaining power have impaired the role of customers in promoting PP’s operating performance. Originality/value This paper validates the role of customers in firms’ strategic development. The study not only contributes to the research on the economic consequences of customers but also adds to the evolving literature of factors affecting the performance of PPs. The findings of the study have important practical implications for both customer relationship management and the supervision of PPs.

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“…To do so, we need at least one instrumental variable that is correlated with insider selling, meanwhile uncorrelated with audit fees. First, following Cui et al (2017), we use the expiration year of restricted shares (ExpirationYear) as an exogenous instrument. Xie et al (2016) find that insider selling significantly increases at the expiration year of restricted shares.…”

Section: Endogeneitymentioning

confidence: 99%

Does insider selling affect audit fees?

Yang

2020

China Journal of Accounting Studies

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Private placement and abnormal corporate payouts: evidence from large stock dividends

Cited by 4 publications

References 21 publications

Determinants of Dividend Payout in Unlisted Spanish Family and Non-Family Firms

Determinants of Dividend Payout in Unlisted Spanish Family and Non-Family Firms

Customer relationship and the operating performance following private placements

Does insider selling affect audit fees?

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