An International IPO Review with a Focus on China

I. IntroductionThe academic research on financial field has undergone considerable development overthe last thirty years. Many important theories and models have been developed whichhave greatly influenced the current financial field. However, although remarkable successhas been achieved in the academic development of finance, there are still many unsolvedproblems in this area. For example, the underpricing of unseasoned new issues of commonstock is still one of the most puzzling phenomena (B…

An International IPO Review with a Focus on China

The inital public offering (IPO) afiermarket performance has received much attention in recent years, and studies have mainly focused on two anomalies: initial underpricing and long-term underperformance. This paper reviews the literature on IPO performance from both theoretical and empirical perspectives. Much attention has been given to the Chinese IPO market due to the severe initial underpricing and inconclusive long-term performance. This paper highlights some of the unique characteristics of Chinese IPOs. Based on the literature, several explanations have been provided to explain the IPO phenomenon in China.