Provincial economic performance and underpricing of IPOs: Evidence from political interventions in China

Jianlei Liu, Konari Uchida, Yuan Li

Research output: Contribution to journalArticle

Abstract

We examine the underpricing of 2,131 Chinese initial public offerings (IPOs) between 2005 and 2017. The results indicate that state-owned enterprises (SOEs) controlled by the local government (local SOEs) offer significantly higher underpricing when they go public than SOEs controlled by the central government and non-SOEs do. This phenomenon is evident for local SOEs from less developed provinces, after controlling for the direct effect of regional economic performance. These results suggest local government officials underprice initial public offerings to make regional companies successfully go public to promote the regional economy.

Original languageEnglish
Pages (from-to)274-285
Number of pages12
JournalEconomic Modelling
Volume86
DOIs
Publication statusAccepted/In press - Jan 1 2019

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Underpricing
Initial public offerings
China
Economic performance
State-owned enterprises
Local government
Direct effect
Regional economy
Regional economics
Central government

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

Provincial economic performance and underpricing of IPOs : Evidence from political interventions in China. / Liu, Jianlei; Uchida, Konari; Li, Yuan.

In: Economic Modelling, Vol. 86, 03.2020, p. 274-285.

Research output: Contribution to journalArticle

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