The Short-Term Impacts of the Registration-Based IPO Reform in China: Towards a More Sustainable Equity Market

Sustainability

Chun Zhou¹  Jiajun Lu²  Wenyu Zhou² 

[1] Guanghua Law School, Zhejiang University, Hangzhou 310008, China;International Business School, Zhejiang University, Haining 314400, China;

关键词: IPO reform;    registration-based IPO system;    IPO cost;    IPO underpricing;    the Chinese A-shares market;   

DOI  :  10.3390/su132011365

来源: DOAJ

【 摘 要 】

The sustainable development of a modern equity market heavily relies on an effective IPO system that can properly reflect the underlying risk, demand, and supply in the IPO market. Recently, China has implemented an unprecedented IPO reform that transforms the previous approval-based IPO system to a registration-based one. Despite its importance, the impacts of the reform still remain unexplored. Using firm-level data from the Chinese A-shares market, we show that the recent IPO reform significantly increases IPO cost and reduces the degree of IPO underpricing. We also investigated the impacts of the reform on the market structures in different IPO service markets. Overall, our findings are consistent with the hypothesis that the registration-based IPO reform makes the IPO system in China more market-oriented. To our best knowledge, this is the first empirical study that sheds light on the short-term impacts of the adoption of a registration-based IPO system.

【 授权许可】

Unknown