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Does venture capital Quan Zi affect stock mispricing: Evidence from Chinese listed companies

PloS one, 2023-04, Vol.18 (4), p.e0281255-e0281255 [Peer Reviewed Journal]

Copyright: © 2023 Chen, Deng. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. ;COPYRIGHT 2023 Public Library of Science ;2023 Chen, Deng. This is an open access article distributed under the terms of the Creative Commons Attribution License: http://creativecommons.org/licenses/by/4.0/ (the “License”), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;2023 Chen, Deng 2023 Chen, Deng ;2023 Chen, Deng. This is an open access article distributed under the terms of the Creative Commons Attribution License: http://creativecommons.org/licenses/by/4.0/ (the “License”), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;ISSN: 1932-6203 ;EISSN: 1932-6203 ;DOI: 10.1371/journal.pone.0281255 ;PMID: 37053247

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  • Title:
    Does venture capital Quan Zi affect stock mispricing: Evidence from Chinese listed companies
  • Author: Chen, Ping ; Deng, Li
  • Kallinterakis, Vasileios
  • Subjects: Biology and Life Sciences ; Capital ; Capital markets ; Companies ; Deviation ; Earnings management ; Economic aspects ; Financial markets ; Initial public offerings ; Institutional investments ; Investments ; Liquidity ; Markets ; Media coverage ; People and Places ; Personal relationships ; Physical Sciences ; Prices ; Social Sciences ; Social structure ; Society ; Supervision ; Transition economies ; Venture capital
  • Is Part Of: PloS one, 2023-04, Vol.18 (4), p.e0281255-e0281255
  • 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.
  • Publisher: United States: Public Library of Science
  • Language: English
  • Identifier: ISSN: 1932-6203
    EISSN: 1932-6203
    DOI: 10.1371/journal.pone.0281255
    PMID: 37053247
  • Source: Public Library of Science (PLoS) Journals Open Access
    Geneva Foundation Free Medical Journals at publisher websites
    AUTh Library subscriptions: ProQuest Central
    PubMed Central
    DOAJ Directory of Open Access Journals
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