Hsuan-chi Chen - Academia.edu (original) (raw)
Papers by Hsuan-chi Chen
The Mathematical Gazette, 2016
This paper explains corporate cash-holding propensity from the new perspective of misvaluation. W... more This paper explains corporate cash-holding propensity from the new perspective of misvaluation. We find a strong cross-sectional relation between misvaluation and cashholding propensity, which can be attributed to both equity-raising proceeds and the exercise of employee stock options. We use the difference-in-difference approach to examine the issue of endogeneity. Several robustness checks also indicate that the explanations associated with the precautionary motive, agency conflicts, near-term cash needs, and tax motives do not drive our results.
Journal of Finance, Jun 1, 2000
Gross spreads received by underwriters on initial public offerings~IPOs! in the United States are... more Gross spreads received by underwriters on initial public offerings~IPOs! in the United States are much higher than in other countries. Furthermore, in recent years more than 90 percent of deals raising $20-80 million have spreads of exactly seven percent, three times the proportion of a decade earlier. Investment bankers readily admit that the IPO business is very profitable, and that they avoid competing on fees because they "don't want to turn it into a commodity business." We examine several features of the IPO underwriting business that result in a market structure where spreads are high.
Journal of Banking & Finance, 2021
Abstract This study uses the Google search volume index as a direct measure of investor attention... more Abstract This study uses the Google search volume index as a direct measure of investor attention to explore the connection between attention-grabbing information and fund flows, future performance, and the survivorship of newly issued funds. We find that investors often engage in attention-driven purchases of new funds that have captured their attention online. However, fund investors who conduct internet searches and make attention-driven purchases are less sophisticated and fail to allocate their capital for earning abnormal returns. We also find that attention-induced inflows can help sustain new funds in competitive fund markets via potential mitigation of mergers and liquidations. Our robustness checks show similar results for old funds, but attention-driven fund flows do not enhance the survival of old funds.
Journal of Corporate Finance, 2010
We examine the firm's choice between an SEO and a PIPE, an innovation in follow-on equity selling... more We examine the firm's choice between an SEO and a PIPE, an innovation in follow-on equity selling mechanism seen in the late 1990s. Our primary finding indicates that the rapid rise of the PIPE market fills the capital needs of firms which may not have access to more traditional alternatives. This lack of access is driven mainly by information asymmetry and weak operating performance. We also show that firms are more likely to choose PIPEs when the general market and the firm's stock are performing poorly. Furthermore, we find that selected firms with access to the public market may prefer a PIPE due to specific cost considerations.
The Journal of Finance, 2000
Gross spreads received by underwriters on initial public offerings~IPOs! in the United States are... more Gross spreads received by underwriters on initial public offerings~IPOs! in the United States are much higher than in other countries. Furthermore, in recent years more than 90 percent of deals raising $20-80 million have spreads of exactly seven percent, three times the proportion of a decade earlier. Investment bankers readily admit that the IPO business is very profitable, and that they avoid competing on fees because they "don't want to turn it into a commodity business." We examine several features of the IPO underwriting business that result in a market structure where spreads are high.
Journal of Financial Stability, 2022
The Mathematical Gazette
is conceptually inferior to vector algebra. One is left with the impression that somehow (2) intr... more is conceptually inferior to vector algebra. One is left with the impression that somehow (2) intrinsically evades direct and short proofs. However, that need not be the case. I hope to have shown in this Note that viewing the problem as a planar one does lead to a short and fairly straightforward derivation of (2), provided that the validity of the planar proposition is first demonstrated. Since that proposition is significant in itself, it should be established anyway if planar vector algebra is properly developed. Drawing attention to the need for a more expressive planar vector algebra is a goal of this Note, apart from proving (2). It is particularly important to stress that by putting to use and , a wealth of properties, such as orientation, relative location, and related phenomena receive due consideration that is impossible when restricted to only linear operations and the scalar product. Making use of and brings to the calculations in planar geometry many benefits, here only glimpsed at. ∧ ⊥
This article provides a game-theoretic model to explain the pattern of “clustering” of gross spre... more This article provides a game-theoretic model to explain the pattern of “clustering” of gross spreads for moderate size offerings and lower spreads for large offerings in the IPO market. I show that investment bankers, while acting non-cooperatively, may charge above-competitive spreads in equilibrium. JEL classification : C73, G24
Journal of Business Finance & Accounting, 2014
The long‐run performance of equity securities subsequent to announcements of open market repurcha... more The long‐run performance of equity securities subsequent to announcements of open market repurchases (OMR) remains a contentious topic. In this paper we propose the “dichotomous expectations hypothesis” which posits that insider trading following share repurchase announcements reveals private information concerning the future operating performance of announcing firms. In particular, insider abnormal purchases (abnormal sales) should predict an improvement (decline) in operating performance that leads to higher (lower) long‐run stock returns. Our hypothesis offers a credible economic link between insider trading and subsequent long‐run stock performance through the intervening variable of operating performance. The empirical results show consistency with this linkage.
The Mathematical Gazette
References 1. C. D. Olds, Continued fractions, The Mathematical Association of America (1963). 2.... more References 1. C. D. Olds, Continued fractions, The Mathematical Association of America (1963). 2. M. Wiener, Cryptanalysis of short RSA secret exponents, IEEE Transactions on Information Theory 36 (1990) pp. 553-558. 3. M. Bunder and J. Tonien, A new attack on the RSA cryptosystem based on continued fractions, Malaysian Journal of Mathematical Sciences 11(S) (August 2017) pp. 45-57. 4. L. Euler, De fractionibus continuis dissertatio, Commentarii Academiae Scientiarum Petropolitanae 9 (1744) pp. 98-137. Available at http://eulerarchive.maa.org/pages/E071.html 5. G. H. Hardy and E. M. Wright, An introduction to the theory of numbers, (6th edn.) Oxford University Press (2008). 10.1017/mag.2018.15 JOSEPH TONIEN Institute of Cybersecurity and Cryptology, School of Computing and Information Technology, University of Wollongong, Australia e-mail: joseph_tonien@uow.edu.au
Journal of Corporate Finance
Journal of Corporate Finance
The North American Journal of Economics and Finance
The North American Journal of Economics and Finance
This study examines the determinants of employer's cash matching policy in 401(k) plans from the ... more This study examines the determinants of employer's cash matching policy in 401(k) plans from the perspective of corporate cash holdings. Based on a sample of 754 401(k) plans during the period 2000-2004, this study has several findings. First, firms with more cash and marketable securities, with a lower probability of financial distress, and with the worse investment opportunities are more likely to match their participants' contributions by cash in 401(k) plans. Second, firms with volatile stock return prefer the cash matching policy to company-stock matching policy, a finding consistent with the argument of "lawsuit avoidance." Third, firms with a high dividend payout policy tend to implement a company-stock matching policy since dividend payment may crowd out the cash available to 401(k) plans. As for the contribution decisions of employees, factors significantly and positively affecting employees' contribution rates include: the presence of an employer's match, especially matching by cash, the firm's growth opportunity, corporate dividend payment, stock return performance, and the autonomy that employees can change their investment arbitrarily.
Financial Management, 2015
SSRN Electronic Journal, 2000
Ritter for their helpful comments and suggestions. We thank Josef Schuster for providing IPOX ind... more Ritter for their helpful comments and suggestions. We thank Josef Schuster for providing IPOX indices data.
SSRN Electronic Journal, 2000
The Mathematical Gazette, 2016
This paper explains corporate cash-holding propensity from the new perspective of misvaluation. W... more This paper explains corporate cash-holding propensity from the new perspective of misvaluation. We find a strong cross-sectional relation between misvaluation and cashholding propensity, which can be attributed to both equity-raising proceeds and the exercise of employee stock options. We use the difference-in-difference approach to examine the issue of endogeneity. Several robustness checks also indicate that the explanations associated with the precautionary motive, agency conflicts, near-term cash needs, and tax motives do not drive our results.
Journal of Finance, Jun 1, 2000
Gross spreads received by underwriters on initial public offerings~IPOs! in the United States are... more Gross spreads received by underwriters on initial public offerings~IPOs! in the United States are much higher than in other countries. Furthermore, in recent years more than 90 percent of deals raising $20-80 million have spreads of exactly seven percent, three times the proportion of a decade earlier. Investment bankers readily admit that the IPO business is very profitable, and that they avoid competing on fees because they "don't want to turn it into a commodity business." We examine several features of the IPO underwriting business that result in a market structure where spreads are high.
Journal of Banking & Finance, 2021
Abstract This study uses the Google search volume index as a direct measure of investor attention... more Abstract This study uses the Google search volume index as a direct measure of investor attention to explore the connection between attention-grabbing information and fund flows, future performance, and the survivorship of newly issued funds. We find that investors often engage in attention-driven purchases of new funds that have captured their attention online. However, fund investors who conduct internet searches and make attention-driven purchases are less sophisticated and fail to allocate their capital for earning abnormal returns. We also find that attention-induced inflows can help sustain new funds in competitive fund markets via potential mitigation of mergers and liquidations. Our robustness checks show similar results for old funds, but attention-driven fund flows do not enhance the survival of old funds.
Journal of Corporate Finance, 2010
We examine the firm's choice between an SEO and a PIPE, an innovation in follow-on equity selling... more We examine the firm's choice between an SEO and a PIPE, an innovation in follow-on equity selling mechanism seen in the late 1990s. Our primary finding indicates that the rapid rise of the PIPE market fills the capital needs of firms which may not have access to more traditional alternatives. This lack of access is driven mainly by information asymmetry and weak operating performance. We also show that firms are more likely to choose PIPEs when the general market and the firm's stock are performing poorly. Furthermore, we find that selected firms with access to the public market may prefer a PIPE due to specific cost considerations.
The Journal of Finance, 2000
Gross spreads received by underwriters on initial public offerings~IPOs! in the United States are... more Gross spreads received by underwriters on initial public offerings~IPOs! in the United States are much higher than in other countries. Furthermore, in recent years more than 90 percent of deals raising $20-80 million have spreads of exactly seven percent, three times the proportion of a decade earlier. Investment bankers readily admit that the IPO business is very profitable, and that they avoid competing on fees because they "don't want to turn it into a commodity business." We examine several features of the IPO underwriting business that result in a market structure where spreads are high.
Journal of Financial Stability, 2022
The Mathematical Gazette
is conceptually inferior to vector algebra. One is left with the impression that somehow (2) intr... more is conceptually inferior to vector algebra. One is left with the impression that somehow (2) intrinsically evades direct and short proofs. However, that need not be the case. I hope to have shown in this Note that viewing the problem as a planar one does lead to a short and fairly straightforward derivation of (2), provided that the validity of the planar proposition is first demonstrated. Since that proposition is significant in itself, it should be established anyway if planar vector algebra is properly developed. Drawing attention to the need for a more expressive planar vector algebra is a goal of this Note, apart from proving (2). It is particularly important to stress that by putting to use and , a wealth of properties, such as orientation, relative location, and related phenomena receive due consideration that is impossible when restricted to only linear operations and the scalar product. Making use of and brings to the calculations in planar geometry many benefits, here only glimpsed at. ∧ ⊥
This article provides a game-theoretic model to explain the pattern of “clustering” of gross spre... more This article provides a game-theoretic model to explain the pattern of “clustering” of gross spreads for moderate size offerings and lower spreads for large offerings in the IPO market. I show that investment bankers, while acting non-cooperatively, may charge above-competitive spreads in equilibrium. JEL classification : C73, G24
Journal of Business Finance & Accounting, 2014
The long‐run performance of equity securities subsequent to announcements of open market repurcha... more The long‐run performance of equity securities subsequent to announcements of open market repurchases (OMR) remains a contentious topic. In this paper we propose the “dichotomous expectations hypothesis” which posits that insider trading following share repurchase announcements reveals private information concerning the future operating performance of announcing firms. In particular, insider abnormal purchases (abnormal sales) should predict an improvement (decline) in operating performance that leads to higher (lower) long‐run stock returns. Our hypothesis offers a credible economic link between insider trading and subsequent long‐run stock performance through the intervening variable of operating performance. The empirical results show consistency with this linkage.
The Mathematical Gazette
References 1. C. D. Olds, Continued fractions, The Mathematical Association of America (1963). 2.... more References 1. C. D. Olds, Continued fractions, The Mathematical Association of America (1963). 2. M. Wiener, Cryptanalysis of short RSA secret exponents, IEEE Transactions on Information Theory 36 (1990) pp. 553-558. 3. M. Bunder and J. Tonien, A new attack on the RSA cryptosystem based on continued fractions, Malaysian Journal of Mathematical Sciences 11(S) (August 2017) pp. 45-57. 4. L. Euler, De fractionibus continuis dissertatio, Commentarii Academiae Scientiarum Petropolitanae 9 (1744) pp. 98-137. Available at http://eulerarchive.maa.org/pages/E071.html 5. G. H. Hardy and E. M. Wright, An introduction to the theory of numbers, (6th edn.) Oxford University Press (2008). 10.1017/mag.2018.15 JOSEPH TONIEN Institute of Cybersecurity and Cryptology, School of Computing and Information Technology, University of Wollongong, Australia e-mail: joseph_tonien@uow.edu.au
Journal of Corporate Finance
Journal of Corporate Finance
The North American Journal of Economics and Finance
The North American Journal of Economics and Finance
This study examines the determinants of employer's cash matching policy in 401(k) plans from the ... more This study examines the determinants of employer's cash matching policy in 401(k) plans from the perspective of corporate cash holdings. Based on a sample of 754 401(k) plans during the period 2000-2004, this study has several findings. First, firms with more cash and marketable securities, with a lower probability of financial distress, and with the worse investment opportunities are more likely to match their participants' contributions by cash in 401(k) plans. Second, firms with volatile stock return prefer the cash matching policy to company-stock matching policy, a finding consistent with the argument of "lawsuit avoidance." Third, firms with a high dividend payout policy tend to implement a company-stock matching policy since dividend payment may crowd out the cash available to 401(k) plans. As for the contribution decisions of employees, factors significantly and positively affecting employees' contribution rates include: the presence of an employer's match, especially matching by cash, the firm's growth opportunity, corporate dividend payment, stock return performance, and the autonomy that employees can change their investment arbitrarily.
Financial Management, 2015
SSRN Electronic Journal, 2000
Ritter for their helpful comments and suggestions. We thank Josef Schuster for providing IPOX ind... more Ritter for their helpful comments and suggestions. We thank Josef Schuster for providing IPOX indices data.
SSRN Electronic Journal, 2000