Split-share structure reform and the underpricing of Chinese initial public offerings

Autor:	Mingzhu Wang, Yan Tong, Arif Khurshed
Rok vydání:	2015
Předmět:	Shock (economics) Information asymmetry business.industry Central government Economics Econometrics and Finance (miscellaneous) Issued shares Financial system Stock market Accounting Business China Initial public offering
Zdroj:	The European Journal of Finance. 24:1485-1505
ISSN:	1466-4364 1351-847X
DOI:	10.1080/1351847x.2015.1107603
Popis:	This paper analyses whether the extreme underpricing of initial public offerings (IPOs) in China has been alleviated by the split-share structure reform in 2005. As an external policy shock to IPO firms, this Reform was designed to convert non-tradable shares into tradable shares, with the potentials to restore the distorted supply–demand relationship of newly issued shares and reduce the information asymmetry in Chinese stock market. Analysing a sample of IPOs in China from 2000 to 2011, we find that the split-share structure reform significantly reduced the magnitude of IPO underpricing since 2005. It had different impacts on the IPO shares issued by state-owned enterprise (SOEs) and non-SOEs. While IPO shares issued by SOEs and non-SOEs had similar underpricing rates before the Reform, non-SOE IPOs show lower underpricing than those of SOEs after the Reform. Furthermore, compared with IPOs issued by SOEs controlled by the central government, those issued by local governments controlled SOEs are more un...
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::91c643cc9d0a9cc9bc099b5dc10ad885 https://doi.org/10.1080/1351847x.2015.1107603 Zobrazit plný text záznamu