How Does the Induction of Block Investors Affect the Firm’s Sensitivity of Investment to Cash Flow? Cases of PIPE in China

• Main Authors: LIN ,CHE-MIN, 林哲民
• Other Authors: SHU, PEI-GI
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/32rycc

碩士 === 輔仁大學 === 金融與國際企業學系金融碩士班 === 105 === In this study we explore how the induction of private investment of private equity (PIPE) investors affects firm’s sensitivity of investment to cash flow, a gauge of agency cost. The case of Chinese listed firm in the sampling period of 2008-2014 indicate that the induction of passive block investors with shareholdings of 12.5% or more heightens the firm’s sensitivity of investment to cash flow, indicating that nonpassive investors heightens firm’s agency cost. By contrast, these block investors when get involved in the board would ameliorate the sensitivity of investment to cash flow. The finding indicates that the critical issue of whether an induction of block investors improves or aggravates firm’s agency cost lies in the crux of whether the block investors do involve in the board. Moreover, we find that the induction of block investors with shareholdings of 12.5% or more tend to associated with a significant price discount. Investors entering the board will improve the company's performance within six months. Long-term no significant performance improvement, but found that the proportion of long-term will affect the company's performance.