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| Author | : Thomas Kwan |
| Publisher | : |
| Total Pages | : |
| Release | : 2014 |
| Genre | : |
| ISBN | : 9783656748502 |
| Author | : Kun-Chih Chen |
| Publisher | : |
| Total Pages | : 63 |
| Release | : 2016 |
| Genre | : |
| ISBN | : |
In this paper, we examine why Chinese reverse merger (RM) firms have lower financial reporting quality. We find that while U.S. RM firms have similar financial reporting quality as matched U.S. IPO firms, Chinese RM firms exhibit lower financial reporting quality than Chinese ADR firms. We further find that Chinese RM firms exhibit lower financial reporting quality than U.S. RM firms. These results indicate that the use of RM process is associated with poor financial reporting quality only in firms from China, where the legal enforcement is weaker than U.S. In addition, we find that compared to Chinese ADR firms, Chinese RM firms have lower CEO turnover performance sensitivity, a measure of bonding incentives, and poorer corporate governance, which in turn explains the lower financial reporting quality in Chinese RM firms. Overall the results suggest that the RM process provides Chinese firms with low bonding incentives and poor governance the opportunity to access the U.S. capital markets, resulting in poor financial reporting quality in Chinese RM firms.
| Author | : Charles M.C. Lee |
| Publisher | : |
| Total Pages | : 56 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
We examine the financial health and performance of reverse mergers (RMs) that became active on U.S. stock markets between 2001 and 2010, particularly those from China (around 85% of all foreign RMs). As a group, RMs are early-stage companies that typically trade over-the-counter. Chinese RMs (CRMs), however, tend to be more mature and less speculative than either their U.S. counterparts or a group of exchange-industry-size matched firms. As a group, CRMs outperformed their matched peers from inception through the end of 2013, even after including most of the firms accused of accounting fraud. CRMs that receive private-equity (PIPE) financing from sophisticated investors perform particularly well. Overall, despite the negative publicity, we find little evidence that CRMs are inherently toxic investments. Our results shed light on the risk-performance trade-off for CRMs, as well as the delicate balance between credibility and access in well-functioning markets.
| Author | : Mei Lin |
| Publisher | : |
| Total Pages | : 54 |
| Release | : 2013 |
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| ISBN | : |
The economy in China is rapidly developing and the Chinese financial market could not satisfy some of the private Chinese companies' growth and needs. These companies are seeking ways to expand their development into the global market. The market of choice was the United States financial market -- one of the most developed markets that are fully protected with a full-fledged legal system and its strong enforcement organizations. However, due to the culture differences between the United States and Chinese financial markets, there would be problems uncovered during the progress of reverse mergers in regards to financial reports and accounting frauds. The sources of data applied in this thesis are mainly the secondary data from SEC filing reports, Bloomberg news reports, World Federation of Exchanges 2007 annual report, and Chinese media reports. After two decades of Chinese reverse mergers in the United States stock market, private Chinese companies broke the rules with accounting frauds and caused the negative influences in the industry. It is certainly a warning for potential companies seeking reverse merger in the United States to follow rules and standards of the financial market in the future. It also led to consequences that the United States Securities and Exchange Commission had to make stronger standards for the reverse mergers, which significantly increased the difficulty of future reverse mergers.
| Author | : |
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| Total Pages | : |
| Release | : 2015 |
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This study has taken as sample all the Chinese companies ever listed on U.S. stock exchanges before December 31, 2012 in order to examine whether the manner of listing, -that is, through an IPO or a reverse merger-, is correlate to the post-listing quality of the firm. Institutional environment and corporate governance are taken as quality measures. Firms listed through reverse merger are found significantly related to a poorer service provided by market intermediaries in their home regions and using external auditors with less prestige. This may partly explain why many cases of financial frauds found since early 2010 involve Chinese reverse merger firms. The findings suggest the need for more stringent requirements and more monitoring with regard to the conduct of audit, concerning both the firms that seek listing through reverse merger and all the auditing firms in the market. Moreover, regional governments in China are expected to make efforts to improve the service level of market intermediaries in order to foster local enterprises and facilitate cross-listings.
| Author | : Assistant Professor of Accounting Rongli Yuan |
| Publisher | : |
| Total Pages | : 248 |
| Release | : 2015-10-07 |
| Genre | : Business & Economics |
| ISBN | : 9781623201333 |
The growing share of institutional investors in the capital market has increasingly brought their role in corporate governance to the fore of academic discourse. While China is no exception in this booming trend, Chinese academia has not given the issue equal attention. Corporate Governance in China: The Role of Institutional Investors contextualizes the assessment of the monitoring function of institutional investors in the Chinese economy using mixed research methods including interviews, secondary data analysis, and a case study. Corporate Governance in China: The Role of Institutional Investors attempts to verify the validity of established agency theory and findings on corporate governance to China. Noting the diverse types of institutional investors in China, author Yuan Rongli singles out financial institutions, particularly securities investment funds and securities companies, which are counterparts of "institutional investors" as traditionally understood, as she probes into the actual functioning of financial institutions in corporate governance as well as the corresponding effects on company performance. Her study, apart from confirming the important role of these financial institution investors, identifies the factors that enhance and limit this role and the main agency problem in China's corporate governance.
| Author | : Jingchen Zhao |
| Publisher | : Edward Elgar Publishing |
| Total Pages | : 293 |
| Release | : 2022-12-06 |
| Genre | : Law |
| ISBN | : 1784719110 |
This book examines corporate governance rules in China, and highlights the deficiencies in current company law, with the purpose of arguing for a more effective derivative action mechanism, for the benefit of shareholders and their companies.
| Author | : Yimiao Chen |
| Publisher | : |
| Total Pages | : 25 |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
In 2012, one in four federal securities class-action lawsuits filed in the U.S. involved Chinese Reverse Merge companies (CRMs). However, these lawsuits sometimes have encountered difficulties in court due to insufficient direct evidence of accounting fraud. We propose a new method for fraud detection: use Chinese companies dual-listed in the U.S. and China to establish a benchmark for the normal GAAP difference between the two countries. Using this methodology, we find that only a small fraction of the discrepancies between delisted CRMs' financial statements filed in the U.S. and those filed in China can be attributed to GAAP difference. This suggests that the remaining discrepancies, which are large and unexplained, are indeed due to accounting fraud. Therefore, it is reasonable to conclude that delisted Chinese Reverse Merger companies enticed U.S. investors with favorable and fraudulent accounting and financial data.
| Author | : Liu, Lixian |
| Publisher | : IGI Global |
| Total Pages | : 380 |
| Release | : 2014-01-31 |
| Genre | : Business & Economics |
| ISBN | : 1466650486 |
While many nations are still struggling from the global financial crisis and regaining their financial security, investors are considering alternative options for investing their money; and the secure financial sector is China appears as a viable option. International Cross-Listing of Chinese Firms examines the successful techniques and strategies that Chinese companies are using within their financial practices. It highlights the foreign-based multinational enterprise theories related to the major international stock markets. By providing the latest theories and research, this book will be beneficial for business practitioners, researchers, and managers interested in the relationship between cross-listing and firm valuation of Chinese firms.
| Author | : Dian Yang |
| Publisher | : |
| Total Pages | : 528 |
| Release | : 2010 |
| Genre | : |
| ISBN | : |
I argue that external forces such as the state and the financial market used their political and market power to promulgate an ideal version of the "modern" firm (largely based on the American model), forcing Chinese firms to adapt their governance practices and strategic choices in tandem. From a broader perspective, it is a process of "modernizing" Chinese firms, or a process of building a "Modern Enterprise System" in China. Specifically, this study shows that the Chinese state was the major agent in the diffusion of the American shareholder-oriented corporate governance to Chinese companies, and both the diversification (pre-1997) and the de-diversification (post-1997) strategies of Chinese firms were largely driven by state policies. Furthermore, I find that China's financial market and institutional investors have been increasingly important in disciplining the corporate executives, shaping the corporate strategies and enhancing the performance of Chinese corporations over the last decade.
