The long-run performance of initial public offerings and its determinants: the case of China |
| |
Authors: | Xiaoqiong Cai Guy S Liu Bryan Mase |
| |
Institution: | (1) Barclays Capital Ltd, London, UK;(2) Economics & Finance, Brunel University, Uxbridge, Middlesex, UB8 3PH, UK |
| |
Abstract: | Existing research finds poor long-run performance of Initial Public Offerings (IPOs), particularly in the US. Using company
IPO data from China’s Shanghai Stock Exchange, we find comparable levels of underperformance. In line with US results, initial
overoptimism and the size of the offer are important explanatory factors for this underperformance. Additional variables include
the earnings per share prior to listing, the decision to switch investment banks at the time of issue and whether the firm
issues shares that can be purchased by foreign investors. These factors suggest that firms in China are able to manipulate
the issue process. In the context of Chinese economic reforms, of particular note is the positive performance impact of the
government shareholding after issue, which supports a signal argument in relation to continuing government support. As a result,
we provide an interesting insight into the influence of the regulatory environment and economic transition on the long-run
performance of IPOs in China.
|
| |
Keywords: | Initial public offering Long-run performance China’ s economy |
本文献已被 SpringerLink 等数据库收录! |
|