Publication Type
Working Paper
Version
publishedVersion
Publication Date
10-2022
Abstract
There has recently been a relaxation of listing regulations to accommodate and attract firms going public with dual-class shares (DCS), notably in Asia. We examine the value implications of DCS adoption by employing an event study around a regulatory change allowing DCS listings in Hong Kong. We find negative market reactions around these regulatory discussions for firms already listed in Hong Kong, especially for firms in technology (tech) sectors. However, the market reaction turned positive for tech firms during Hong Kong’s first DCS listing. We identify two distinct channels that influenced shareholders’ perspectives on DCS: the competition channel, which dominated in the earlier discussions, as firms facing more competitive threats experienced lower returns; and the capital channel, which arose later, as it became clear that the regulatory change would enable all tech firms to attract more institutional capital.
Keywords
Dual-class shares, technological industry, Asia, competition channel, capital channel
Discipline
Asian Studies | Finance and Financial Management | Strategic Management Policy
Research Areas
Finance
First Page
1
Last Page
53
Identifier
10.2139/ssrn.4248516
Publisher
European Corporate Governance Institute – Finance Working Paper No. 852/2022
Citation
LIANG, Hao; NGUYEN, Tran Bao Phuong; and ZHANG, Wei.
The sun is rising in the East: Dual-class shares and the competitive landscape of technological industries in Asia. (2022). 1-53.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7144
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.2139/ssrn.4248516
Included in
Asian Studies Commons, Finance and Financial Management Commons, Strategic Management Policy Commons