Anson Wong

Examining the performance of venture-backed companies in the Hong Kong IPO market

This empirical study investigates whether venture capitalists (VCs) can certify their portfolio companies as the most promising ones and whether they can alleviate the IPO underpricing issue in Hong Kong market. Although a number of studies show that the VCs can ease underpricing issues and can help their ventures generate better post-IPO operational performance in the US market, we find the effects of VC participations in Hong Kong are different. We find that the underpricing issues of VC-backed IPOs are more severe than non-VC-backed IPOs. We make use of key financial ratios to compare their post-IPO operating performances and find that VC-backed post-IPO performance is poorer than non-VC-backed performance. The result reflects that VCs cannot certify their portfolio companies as those with better prospects and they cannot improve the IPO underpricing issue in Hong Kong market. The significant findings are different from previous studies to some extent. In short, it can add value to the previous articles and tend to solve their drawbacks. It can also contribute to the literature and add insight for future studies on VC development in other Asian markets.

The role of government in the venture capital market with asymmetric information

Information asymmetry increases the risks undertaken by venture capitalists. The present study departs from the tendency in earlier analyses to attribute the problem of information asymmetry to the entrepreneur only. In view of the obvious social benefits that the development of the venture capital industry brings, the government should take upon itself to consider tax incentives and changes to regulatory policies in order to attract venture capital investments. Three scenarios are portrayed here to examine the issue of asymmetric information in the venture capital market: (1) when both the venture capitalists and entrepreneurs efforts are observable and the government incentive policy is available; (2) when the entrepreneurs effort is unobservable but the venture capitalists is observable and government tax incentive is available; and (3) when the entrepreneurs effort is observable but the venture capitalists effort is unobservable, and regulatory monitoring and government tax incentives are uncertain. This investigation reveals that the tax incentive policy and regulatory measures put in place by the government can significantly and positively affect the outcome of the entrepreneurial project by reducing information asymmetry.

The Evolution of the Venture-Capital Market in China: Current Trends in VC-Financing Strategies and Investment Preferences

This article examines the development of the venture capital (VC) industry in China over the past two decades. In recent years, the industries of interest for investment among VCs spread from information technology to other areas such as the financial services and the heavy manufacturing sectors. From 1990 to 2010, VC seed money and start-up funding significantly decreased, but, pre-IPO VC financing increased considerably. There has also been a shift in the sourcing of VC in the China market away from the few traditional market players such as Japan, the United States, and the United Kingdom in the earlier years. Today, Middle Eastern and European countries (e.g., Israel, UAE, Netherlands, and Finland) are important purveyors of VC.This report summarizes the difficulties encountered in the development of the VC industry in China and provides a number of successful IPO examples of Chinese ventures backed by VCs to illustrate the investment opportunities for VCs.

Effective Evaluation Criteria for Successful Ventures: A Study of Venture Capital in Hong Kong

This article reports on a survey of venture capitalists to elicit information on effective criteria and vital factors attributable to the success and failure of firms financed by venture capital in Hong Kong, one of the largest venture capital centers in Asia. The survey data are analyzed through four statistical approaches to verify the significance of these factors and criteria. The findings are compared with those of prior studies on European, North American, and Asian countries. This article fills a gap in the literature by comparing the implications of vital factors and the effectiveness of evaluation criteria utilized by venture capitalists in successful and unsuccessful ventures.

The association between cost of debt and Hong Kong politically connected firms

This paper investigates the association between Hong Kong politically connected firms and their cost of debt. We extend the knowledge of this association by comparing our results with those of Bliss and Gul (2012) who used Malaysian data to examine it. We find that Hong Kong politically connected firms have lower interest rates than non politically connected firms. Our result contrasts with Bliss and Gul (2012), but is consistent with the result of Houston, Jiang, Lin and Ma (2014) who used U.S. data. We argue that these contrasting results can be attributed to differences in the levels of lending institution sophistication, and of economic wealth and development between Hong Kong and the U.S. on the one hand and Malaysia on the other.

Put All the Eggs in the Same Basket – An Empirical Examination of US Monetary Policy Stance and Asian Stock Markets Integration

The objective of this paper is to explore the stock markets integration between the US and the Asian stock markets during different US monetary policy stances. Our empirical findings tend to suggest that stock markets are highly integration during the periods of US’s easy monetary policy stance. Our findings also indicate that when the Fed lowers the FFR, there will be more money invested in the stock markets in the US as well as in the Asian stock markets. When the stock markets are highly integration and pose a puzzle of the benefit of international diversification. In other word, when the global stock markets are highly integrated, it seems like we just put all the eggs in the same basket.

Classroom Response Systems and Student Performance Improvement: Local Versus International Students

ABSTRACT The clicker is one of the most popular mobile classroom response systems. A number of studies reported that clickers could effectively encourage students to participate in class. However, most of them are not talking about Chinese students and their finding seldom reported the difference in perception between Chinese and international students on using the mobile classroom response system in learning. They seldom examine the issue of cultural differences on the application of these learning management systems. The study can fill in the gap to collect their perception on using clickers in Hong Kong. The result shows that both Chinese and international students are keen on using clickers in class. The clicker is found to be able to advance learning efficacy and raise student participation in class.

Dynamics of Deflation and Unemployment: Fall into an Abyss of Depression

Business cycles, reflected in changes in the rate of growth, consumer spending, and price levels are experienced by all economies. History shows that economic activities accelerate, decelerate, and accelerate again from time to time. However, many policy makers find it very difficult to manage changes in economic activities, particularly changes in price levels and unemployment rates because a dramatic change in these variables can affect the lives of people at large, causing widespread dissatisfaction with the government of the day. The global financial crisis in 2008 had a considerable impact on economies all over the world. Many enterprises were forced to close down because of cash flow problems and a large number of jobs were lost. Much of what was believed to be glorious and prospective suddenly became gloomy and retrospective. Many people tried to provide explanations for such abrupt changes. Policy makers are eager to find ways to revive the momentum and growth of economies, such as manipulating money supply and interest rates. Unemployment problems and the pressure of deflation make the future even gloomier. Instead of trying to investigate the reasons for such financial crises and why we cannot foresee them, we are attempting to explain the danger and problem of deflation, how economic depression happens, and the relationships between domestic deflation, unemployment, and wage changes and compare the situations in other economies, for example, those of Europe, Japan, Hong Kong, and the USA.