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Does venture capital Quan Zi affect stock mispricing: Evidence from Chinese listed companies
Chinese traditional culture is characterized by "Quan Zi" culture with a "differential order pattern". As a special informal institutional arrangement, "Quan Zi" plays an important role in the capital market. This paper investigates how Venture Capital Quan Zi affects t...
Autores principales: | , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Public Library of Science
2023
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10101474/ https://www.ncbi.nlm.nih.gov/pubmed/37053247 http://dx.doi.org/10.1371/journal.pone.0281255 |
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author | Chen, Ping Deng, Li |
author_facet | Chen, Ping Deng, Li |
author_sort | Chen, Ping |
collection | PubMed |
description | Chinese traditional culture is characterized by "Quan Zi" culture with a "differential order pattern". As a special informal institutional arrangement, "Quan Zi" plays an important role in the capital market. This paper investigates how Venture Capital Quan Zi affects the stock mispricing of invested companies. Using the syndicate investment data of China’s venture capital institutions from 2009 to 2019, this study documents that Venture Capital Quan Zi significantly increases the positive deviations of stock prices of Quan Zi-backed firms but has no obvious influence on the negative deviations, showing an asymmetric effect on stock mispricing. In addition, this effect is dynamic. Stock mispricing significantly increased in the lock-up period and the following year, but then gradually weakened. Mechanism tests suggest that, on the one hand, Venture Capital Quan Zi increases a company’s earnings manipulation, thus raising investors’ expectations to push up stock prices. On the other hand, Venture Capital Quan Zi boosts the stock price through market reaction channels, increasing institutional investors’ shareholdings, positive media coverage and stock liquidity. This paper has high theoretical and applied value to guide the orderly competition of capital and the supervision of institutional investors. |
format | Online Article Text |
id | pubmed-10101474 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2023 |
publisher | Public Library of Science |
record_format | MEDLINE/PubMed |
spelling | pubmed-101014742023-04-14 Does venture capital Quan Zi affect stock mispricing: Evidence from Chinese listed companies Chen, Ping Deng, Li PLoS One Research Article Chinese traditional culture is characterized by "Quan Zi" culture with a "differential order pattern". As a special informal institutional arrangement, "Quan Zi" plays an important role in the capital market. This paper investigates how Venture Capital Quan Zi affects the stock mispricing of invested companies. Using the syndicate investment data of China’s venture capital institutions from 2009 to 2019, this study documents that Venture Capital Quan Zi significantly increases the positive deviations of stock prices of Quan Zi-backed firms but has no obvious influence on the negative deviations, showing an asymmetric effect on stock mispricing. In addition, this effect is dynamic. Stock mispricing significantly increased in the lock-up period and the following year, but then gradually weakened. Mechanism tests suggest that, on the one hand, Venture Capital Quan Zi increases a company’s earnings manipulation, thus raising investors’ expectations to push up stock prices. On the other hand, Venture Capital Quan Zi boosts the stock price through market reaction channels, increasing institutional investors’ shareholdings, positive media coverage and stock liquidity. This paper has high theoretical and applied value to guide the orderly competition of capital and the supervision of institutional investors. Public Library of Science 2023-04-13 /pmc/articles/PMC10101474/ /pubmed/37053247 http://dx.doi.org/10.1371/journal.pone.0281255 Text en © 2023 Chen, Deng 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 Chen, Ping Deng, Li Does venture capital Quan Zi affect stock mispricing: Evidence from Chinese listed companies |
title | Does venture capital Quan Zi affect stock mispricing: Evidence from Chinese listed companies |
title_full | Does venture capital Quan Zi affect stock mispricing: Evidence from Chinese listed companies |
title_fullStr | Does venture capital Quan Zi affect stock mispricing: Evidence from Chinese listed companies |
title_full_unstemmed | Does venture capital Quan Zi affect stock mispricing: Evidence from Chinese listed companies |
title_short | Does venture capital Quan Zi affect stock mispricing: Evidence from Chinese listed companies |
title_sort | does venture capital quan zi affect stock mispricing: evidence from chinese listed companies |
topic | Research Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10101474/ https://www.ncbi.nlm.nih.gov/pubmed/37053247 http://dx.doi.org/10.1371/journal.pone.0281255 |
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