CONTROLLING SHAREHOLDERS, POLICY ENVIRONMENT AND ANNOUNCEMENT EFFECT: EVIDENCE FROM PEPS IN CHINA LISTED PROPERTY COMPANIES
DOI:
https://doi.org/10.21837/pm.v23i39.1941Keywords:
Announcement Effect, Controlling Shareholders, Event Study, Private Equity Placement, Real Estate Firms, Regression AnalysisAbstract
Over the past four decades, the Chinese real estate market has grown rapidly, accompanied by significant risk accumulation. Private equity placement (PEP), a major form of equity financing, has received limited scholarly attention with respect to its effectiveness, the role of controlling shareholders, and the influence of policy environments in the real estate industry. This study addresses this gap by analysing PEPs conducted by 109 listed property firms using an event-study method and regression analysis. The results show consistently positive cumulative abnormal returns (CARs) around PEP announcements, with placements involving controlling shareholders generating significantly higher CARs, indicating market recognition of their supportive role and certification effect. Although positive announcement effects persist across different policy environments, further analysis reveals that the announcement effect shows no statistically significant relationship with the policy environment variable within shorter event windows. This suggests that short-term announcement effects are primarily driven by market sentiment rather than by a rational reassessment of policy-induced fundamentals.
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