英语论文网

gative abnormal returns at the time of announcement. Dierkens (1991) also displays that the size of the information asymmetry varies over the life of the firm and the information asymmetry is a significant variable for equity issues[172].

Wruck (1989) , Hertzel and Smith (1993), Kato and Schallheim (1993), and Wu et al. (2005) found that a positive announcement returns for firms conduct the private placements[61,62,128,173]. A strong relationship between discounts and information cost was found and they interpret that discount as a proxy for the information cost tends to compensate buyers (Hertzel and Smith, 1993)[61]. Hence, Hertzel and Smith (1993)[61] confirm that the information asymmetry is a better explanation for the private placements than monitoring effect proposed by Wruck (1989)[128]. In addition, Hertzel and Smith (1993) noted that firms can mitigate information asymmetry problems[61]. In contrast, Wu (2004) examined the determinants of equity-selling mechanisms relating to information asymmetry. Private placement firms are characterized by high information asymmetry and the firm that conduct private placement generally has gone public at an earlier life cycle stage, and then, less has been backed by venture capitalists after initial offer[174]. A higher degree of information asymmetry about value are more likely to choose private placements, if there is uncertainty about the value of a new investment opportunity (Cronqvist and Nilsson, 2005)[66].

Monitoring Hypothesis 监控假说
Active investors such as mutual funds or other institutional investors who have the resources to monitor management are attracted to purchase private placements. Private equity placements alter ownership concentration and this leads to an improvement in monitoring, thus enhancing shareholders' wealth (Wruck, 1989)[128]. Jensen (1986) and Jensen and Meckling (1976) argued similar to the incentive alignment hypothesis. The change in concentration of ownership after private placements reveals new information to the market, thus signaling an efficient allocation of scarce resources[50,51].

Alternatively, Myers and Majluf (1984) argue that private equity placements are undervalued and mitigates the under-investment problem of firms and wealth transfers to new shareholders are reduced. But, those are normally arised after public issue. They also suggested that the willingness of private investors to commit funds to a firm, together with management's decision to forego public issue. This conveys as speacial information to the market that management believes that the firm is undervalued[52]. This view is also supported by Hertzel and Smith (1993)[61]. Furthermore, Kahn and Winton (1998) state that when the market expects a firm to do badly and/or there is uncertainty, it encourages intervention. Increased trading tends to push the firm's return back in the unexpected direction and increases its trading profit[175].

Other studies that have argued against monitoring hypothesis proposed by Wruck (1989) include Wu (2004)[128,174] and Wu et al. (2005)[173]. As the managers' play a crucial role in selecting those few sophisticated investors for private placements, investors that have a tendency to vote in favour of the managers or protect managers' positions are likely to be selected (Wu, 2004)[188]. Wu (2004) reported that private placements are not motivated by monitoring and also the