Abstract
This paper selects the data of China’s A-share listed companies from 2012 to 2018, and uses propensity score matching and difference-in-difference method to analyze the impact of private placement on enterprise innovation. The research found that: private placement will promote enterprise innovation; after further subdividing the nature of ownership, compared with state-owned enterprises, the role of private placement in promoting enterprise innovation is more obvious in non-state-owned enterprises; after subdividing the characteristics of the sector, compared to the Main board listed companies, the promotion effect of private placements on enterprise innovation is even more pronounced on GEM and SME board listed companies. Based on the empirical research in this article, regulators should further improve the private placement system, while encouraging investors to actively exercise their supervisory power, supervise the use of funds raised by private placement and actively support enterprise innovation activities, so as to enhance the innovation vitality of the entire economic market.
Highlights
Private placement refers to the act of a listed company’s non-public offering of shares to qualified specific investors
The research found that: private placement will promote enterprise innovation; after further subdividing the nature of ownership, compared with state-owned enterprises, the role of private placement in promoting enterprise innovation is more obvious in non-state-owned enterprises; after subdividing the characteristics of the sector, compared to the Main board listed companies, the promotion effect of private placements on enterprise innovation is even more pronounced on GEM and Small and Medium (SME) board listed companies
The regression results of propensity score matching and difference-in-difference method (PSM-DID) model are as follows: According to the full sample regression results in column (1) of Table 6, it can be seen that the regression coefficients of the did cross product are significantly positive, indicating that the private placement has a significant role in promoting enterprise innovation
Summary
Private placement refers to the act of a listed company’s non-public offering of shares to qualified specific investors. From the perspective of management and supervision (Barclay et al, 2007; Wruck & Wu, 2008), it is pointed out that in order to maintain its position in the listed company, the controlling shareholders tend to increase the issuance to the passive investors in the process of private placement, because the passive investors will not interfere with the company’s daily decision-making and supervision of the company’s operation and management too much, and the discount issuance is the compensation for the investors’ negative behavior. This paper uses 2012-2018 data from China’s A-share listed companies to use propensity score matching and difference-in-difference method (PSM-DID) to empirically analyze the impact of private placement on enterprise innovation
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