MA, Yuemeng
(2019)
Research on the Motivation and Risk of the Chinese Concept Stocks Return.
[Dissertation (University of Nottingham only)]
Abstract
Since the 1990s, with limited financing channels of Internet companies in China, a large number of small and medium-sized companies have gone public in the US. However, foreign investors have different cognition on the China Internet business model and philosophy, which restricts the expansion and sustainable development of the Chinese concept stocks. With the rapid growth of China's economy and policy support, China Stocks began to choose privatization and delisting to return to the Chinese market.
The paper analyzes the motivation of the stock return to the A-share market from two perspectives: internal and external. From the internal factors, there is a correlation between the privatization and long-term undervaluation, free cash flow excess, wealth transfer, poor operating conditions, and inability to maintain listing costs. This paper uses two regression analysis methods to prove the internal motivation of the return of china companies. First, the China stocks listed in the US are divided into delisting groups and control groups. Then, a paired t-test was used to see if there was a significant difference between the two variables. For testing the difference in delisting motives at different times, this paper performs logit regression by controlling time variables. The second method is the Cox proportional hazard regression model. The privatization delisting and listing time are the dependent variables. The model can simultaneously analyze the influence of many factors on the delisting of enterprises. From the external environment, there is the impact of changes in the US stock market, the recognition of the Chinese stocks by foreign investors, and the china relevant policy.
Combined with the delisting process of the stock market, this paper analyzes the risk of delisting from the US, demolition VIE structure and A-share market listing, and gives corresponding suggestions. The innovation of this paper is to analyze the motivation of stock return in different periods and analyze the risk of returning A-share market. The insufficient is that there is still a lack of analysis and processing of the data. For example, in the Cox proportional hazard regression, the method of classifying data is too broad, which is not conducive to the establishment of a more detailed forecasting model.
The full text discusses the motivations and risks of the return of the stocks. The result of empirical analysis also shows that there are differences in the motives of overseas companies to return to the A-share market in different periods. In general, the return of China Stocks is beneficial to improve investment structure and industry level of China stock market.
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