Conflicts of interest and China's A-share underpricing

Gannon, Gerard; Zhou, Yuwei

doi:10.1016/j.irfa.2007.05.002

Cited by 18 publications

(7 citation statements)

References 12 publications

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“…Before the year 2006, the first four types of shares are not permitted to be sold in the secondary market but only be transferred to another institution or person. Many empirical studies have demonstrated that these non-transferable shares play a significant role in IPO issuing, especially in underpricing because they relate to uncertainty, information asymmetry and management efficiency, even though they can't be sold in the secondary market to convert into cash flow directly (Chan et al, 2004;Chen et al, 2004;Chi & Padgett, 2005;Gannon & Zhou, 2008;Guo & Brooks, 2008;Mok & Hui, 1998;Su & Fleisher, 1999).…”

Section: Structure Of Shareholdersmentioning

confidence: 99%

Duration of IPOs between offering and listing: Cox proportional hazard models—Evidence for Chinese A-share IPOs

Guo

Brooks

2009

International Review of Financial Analysis

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Section: Structure Of Shareholdersmentioning

confidence: 99%

Duration of IPOs between offering and listing: Cox proportional hazard models—Evidence for Chinese A-share IPOs

Guo

Brooks

2009

International Review of Financial Analysis

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“…Furthermore, successful IPOs help venture capitalists raise capital for new funds (Gompers, 1996) who can then invest in new small businesses. Therefore, studying IPO cycles in China and Hong Kong has broader implications for the strands of literature that focus on entrepreneurship, venture capital industry, and IPO regulations in these markets (see e.g., Cressy and Farag, 2014, Gannon and Zhou, 2008, and Jiang et al, 2014. This paper fills a gap in the literature by studying the anatomy of IPO waves in China and Hong Kong, the two leading IPO markets in Asia.…”

Section: Introductionmentioning

confidence: 99%

IPO waves in China and Hong Kong

Güçbilmez¹

2015

International Review of Financial Analysis

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We analyze the anatomy of IPO waves in China and Hong Kong and draw comparisons with the US IPO cycles. The lead-lag relationship between IPO initial returns and IPO volume observed in the US is absent in these two Asian markets. Similar to the US, IPO volume in Hong Kong is sensitive to changes in market conditions and exhibits seasonal variations. In sharp contrast, however, Chinese IPO activity is much less responsive to past market returns and volatility. Surprisingly, hot markets still emerge in China, not because of market forces as in the US and Hong Kong, but due to regulatory choices. JEL classification: E32; G30; G32 AbstractWe analyze the anatomy of IPO waves in China and Hong Kong and draw comparisons with the US IPO cycles. The lead-lag relationship between IPO initial returns and IPO volume observed in the US is absent in these two Asian markets. Similar to the US, IPO volume in Hong Kong is sensitive to changes in market conditions and exhibits seasonal variations. In sharp contrast, however, Chinese IPO activity is much less responsive to past market returns and volatility. Surprisingly, hot markets still emerge in China, not because of market forces as in the US and Hong Kong, but due to regulatory choices. JEL classification: E32; G30; G32

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“…Second, although a variety of studies have confirmed severe initial underpricing of Chinese IPOs (see e.g. Mok and Hui, 1998; Su and Fleisher, 1999; Chen et al ., 2004; Chi and Padgett, 2005a; Gannon and Zhou, 2008; Guo and Brooks, 2008), very little research has been conducted on long‐run performance in China’s stock market. Extant studies are limited either from the short sample periods used or by the incomplete datasets examined, and, hence, the existing results are by no means conclusive.…”

Section: Introductionmentioning

confidence: 99%

Long‐Run Performance of Chinese Initial Public Offerings: Further Evidence*

Bangassa

Brookfield

2011

Asia-Pac J of Fin Stud

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This study examines the long-run performance of 936 Chinese initial public offerings (IPOs) over the period 1996 to 2005 (the post-issue return evidence ends in June 2008). Using a number of empirical methods, including event-time and calendar-time approaches based on a size and industry matching firm benchmark, we find a significant long-run overperformance using the equal-weighted buy-and-hold abnormal returns, although not for the valueweighted returns, suggesting that the performance of small-size IPO firms is superior to that of large-size IPO firms. The significant overperformance disappears, however, when using cumulative or calendar-time abnormal returns. The preset study provides out-of-sample evidence in an emerging market context in support of Fama's (1998) argument that reported long-run performance is sensitive to the method of analysis. Finally, based on a rich set of explanatory factors as proxies for both signaling and ex-ante uncertainty characteristics, our results are supportive of the signaling hypothesis, but inconsistent with the divergence of opinion hypothesis.

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Conflicts of interest and China's A-share underpricing

Cited by 18 publications

References 12 publications

Duration of IPOs between offering and listing: Cox proportional hazard models—Evidence for Chinese A-share IPOs

Duration of IPOs between offering and listing: Cox proportional hazard models—Evidence for Chinese A-share IPOs

IPO waves in China and Hong Kong

Long‐Run Performance of Chinese Initial Public Offerings: Further Evidence*

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