Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/187567 
Year of Publication: 
2012
Citation: 
[Journal:] China Journal of Accounting Research [ISSN:] 1755-3091 [Volume:] 5 [Issue:] 2 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2012 [Pages:] 101-125
Publisher: 
Elsevier, Amsterdam
Abstract: 
We study the effect of state control on capital allocation and investment in China, where the government screens prospective stock issuers. We find that state firms are more likely to obtain government approval to conduct seasoned equity offerings than non-state firms. Further, non-state firms exhibit greater sensitivities of subsequent investment and stock performance to regulatory decisions on stock issuances than state firms. Our work suggests that state control of capital access distorts resource allocation and impedes the growth of non-state firms. We also provide robust evidence that financial constraints cause underinvestment.
Subjects: 
State control
Access to capital
Firm growth
Regulation
JEL: 
G30
G32
G38
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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