Initial public offerings in China: Underpricing, statistics and developing literature

Abstract

We review more than two decades of literature on initial public offerings (IPOs) in China, discussing the research hypotheses that have been studied as well as the main findings. We summarize past and current developments in the literature and highlight the research problems which have not yet been adequately resolved. We provide updated information on the popularity of IPOs and allocation mechanisms over the last 25 years as well as on the underpricing that is associated with the usage of each IPO allocation mechanism. We also suggest new avenues for future research, based on the identified gaps in the extant literature.

Analysis of the dynamics of IPO transactions in the banking sector

“…Спрос на акции китайских кредитных учреждений во время выхода на IPO в основном был представлен локальными инвесторами и финансовыми институтами и значительно превосходил предложение -книги заявок часто переподписывались несколько раз, а зачастую и несколько десятков раз [11]. Стоит отметить, что столь высокие показатели доходности в первый день торгов акциями банков в Китае объясняются спецификой локального рынка и характерны не только для банковской сферы [12].…”

“…The author concludes that the placement of shares of credit institutions during the hot market period is the most promising in terms of the volume and dynamics of raising funds; the IPO market of credit institutions retains high growth potential, primarily in Asia and the CIS. Проблемам изучения рынка IPO посвящены работы ряда экономистов, таких как Н. Лианг [5], М. Дикл [6], В. Мехмуд [7], К. Сонг и других [8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26], однако вопросу IPO в банковской сфере уделяется мало внимания в научном сообществе, несмотря на всю важность данного сектора для экономики.…”

The determinants of IPO initial returns in emerging markets: a quantile regression

“…Moreover, market-specific determinants incorporate market return (a proxy for investor sentiment) and the stock market traded value (a proxy for stock market liquidity). Country (institution)-specific determinants include, inter alia, legal framework quality and contract enforcement (see, for example, Ljungqvist, 2007;Engelen and van Essen, 2010;Chen et al, 2017;Azevedo et al, 2018;Marcato et al, 2018). Scholars (e.g.…”

“…Country (institution)-specific determinants include, inter alia , legal framework quality and contract enforcement (see, for example, Ljungqvist, 2007; Engelen and van Essen, 2010; Chen et al. , 2017; Azevedo et al. , 2018; Marcato et al.…”

Financial crisis of 2008 and outward foreign investments from China and India

“…Importantly, their foreign investment targets (distressed assets) became cheaper after the financial crisis and the reliance on leverage as the instrument of finance inured Chinese firms to the fluctuations of stock markets and the other financial implications of the crisis. Domestic credit provided by financial sector (as a percentage of GDP) increased from 132.591% in 2005 to 194.272% in 2015 and IPO activity in China was markedly higher with a record number of 347 IPOs in 2010, however, it slowed down in subsequent years to 42 in 2015 (Azevedo et al, 2018). Consequently, their outward investment paths that looked so similar to that of Indian firms before 2008 began to diverge rapidly.…”