This paper documents an anomaly in privately-placed stock returns in China and provides an explanation based on deliberate interest transfers. Using a sample of private investments in public equity (PIPEs) with lock-up periods ending between 2007 and 2015, we find that stocks with price inversion (unlock-date price lower than the issuing price) generate higher short-term returns post lock-up period than other stocks, and the greater the degree of price inversion, the better the short-term returns. This anomaly cannot be explained by the effects of price reversal, investors' under-reaction to companies' prospects, or improved governance after PIPEs. Rather, it reflects the interests transferred by issuing firms to participating investors via means including aggressive earnings management and dividend increase, given the unique regulations on PIPEs in China. Interest transfer is particularly pronounced if local investors participate in a PIPE, but sound corporate governance can restrain it.

This paper examines the spillover effect of environmental regulatory pressure on firms' green technological innovation, from the perspective of supply chain relationships. Analyzing data from Chinese listed companies, we find that the average environmental regulatory pressure faced by the customer firms of a supplier firm enhances the green patent applications filed by the supplier firm. When the industry of the supplier is more competitive or the proportion of the supplier's sales from its largest customer is higher, the supplier feels more pressured to pursue green innovation, resulting in more green patent filings. Thus, via their negotiation power, customer firms can prompt the supplier firm to innovate to meet their demand for green technologies. Finally, we show that this effect is particularly pronounced when the supplier firm has a strong financial position, is located in a highly marketized region, receives low R&D government subsidies, or enjoys a high ESG rating.

We find that minority shareholders’ voting opposition to dividend proposals is associated with significantly higher cash dividend payout in the following year for stocks listed in Shanghai Stock Exchange. When minority shareholders’ voting opposition increases, the likelihood and frequency of regulatory penalties increase. The reverse happens after firms increase dividend payout. Minority shareholders’ voting opposition has a stronger positive effect on cash dividend payout when they post more messages in stock forums and when independent directors express dissenting opinions. The effect is weaker if the board chair or CEO has political connections. Minority shareholders’ voting opposition does not have significant effects on the growth rate of earnings and the level of earnings management. But we do find evidence that minority shareholder voting opposition reduces expropriation by major shareholders. The evidence supports a hypothesis that regulators use the minority shareholder voting results to screen out possible cases of shareholder oppression.