Accounting-Based Regulation in Emerging Markets: The Case of China's Seasoned Equity Offerings

• Main Authors: WANG, Jiwei, CHEN, Kevin
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2007
• Subjects: Accounting; Business Law, Public Responsibility, and Ethics; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/195; http://dx.doi.org/10.1016/j.intacc.2007.06.001
• Institution: Singapore Management University

In China, listed companies are required to achieve a minimum return on equity (ROE) before they can apply for permission to issue additional shares through seasoned-equity offerings (SEO). We document two benefits of this accounting-based regulation in China. First, this regulation limits the increa...