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Private placements of equity and accessibility of bank loans

This study investigates the changes in quantity and cost of bank loans after a private placement of common stocks by A-share listed companies in China from 2011 to 2021. This research is derived from the signaling theory and is based on a difference-in-difference design. Through propensity score mat...

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Autores principales: Song, Xin, Liu, Chao, Ding, Zijie, Huang, Chenchen, Zhang, Qiongyao
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Public Library of Science 2023
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10016703/
https://www.ncbi.nlm.nih.gov/pubmed/36920971
http://dx.doi.org/10.1371/journal.pone.0281510
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author Song, Xin
Liu, Chao
Ding, Zijie
Huang, Chenchen
Zhang, Qiongyao
author_facet Song, Xin
Liu, Chao
Ding, Zijie
Huang, Chenchen
Zhang, Qiongyao
author_sort Song, Xin
collection PubMed
description This study investigates the changes in quantity and cost of bank loans after a private placement of common stocks by A-share listed companies in China from 2011 to 2021. This research is derived from the signaling theory and is based on a difference-in-difference design. Through propensity score matching, the sample comprises companies that placed equity privately in the experiment group and companies that did not place equity privately in the control group. We find evidence that the increase in bank loans slowed down, and the cost of bank loans increased after the private placement. The signaling effect of private placements is robust to various additional tests. Further analysis indicates that when state-owned enterprises place equity privately, their access to bank loans is not affected. When institutional investors participate in the private placement, the company’s access to bank credit does not go through significant changes. In addition, private placements by companies located in regions with higher levels of marketization of the financial market do not reduce the cost of bank loans.
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spelling pubmed-100167032023-03-16 Private placements of equity and accessibility of bank loans Song, Xin Liu, Chao Ding, Zijie Huang, Chenchen Zhang, Qiongyao PLoS One Research Article This study investigates the changes in quantity and cost of bank loans after a private placement of common stocks by A-share listed companies in China from 2011 to 2021. This research is derived from the signaling theory and is based on a difference-in-difference design. Through propensity score matching, the sample comprises companies that placed equity privately in the experiment group and companies that did not place equity privately in the control group. We find evidence that the increase in bank loans slowed down, and the cost of bank loans increased after the private placement. The signaling effect of private placements is robust to various additional tests. Further analysis indicates that when state-owned enterprises place equity privately, their access to bank loans is not affected. When institutional investors participate in the private placement, the company’s access to bank credit does not go through significant changes. In addition, private placements by companies located in regions with higher levels of marketization of the financial market do not reduce the cost of bank loans. Public Library of Science 2023-03-15 /pmc/articles/PMC10016703/ /pubmed/36920971 http://dx.doi.org/10.1371/journal.pone.0281510 Text en © 2023 Song et al https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
spellingShingle Research Article
Song, Xin
Liu, Chao
Ding, Zijie
Huang, Chenchen
Zhang, Qiongyao
Private placements of equity and accessibility of bank loans
title Private placements of equity and accessibility of bank loans
title_full Private placements of equity and accessibility of bank loans
title_fullStr Private placements of equity and accessibility of bank loans
title_full_unstemmed Private placements of equity and accessibility of bank loans
title_short Private placements of equity and accessibility of bank loans
title_sort private placements of equity and accessibility of bank loans
topic Research Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10016703/
https://www.ncbi.nlm.nih.gov/pubmed/36920971
http://dx.doi.org/10.1371/journal.pone.0281510
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