This research examines the long-run Initial Public Offerings (IPO) stock performance of a large Chinese sample, and in particular the relationship between initial reserves (capital reserves and revenue reserves immediately after the IPO) and long-run IPO stock performance. In general, Chinese...

This paper investigates whether prospect theory (PT) or a preference for lottery-like gains on stocks can explain the peculiarities of IPO returns in China. Chinese IPOs offer investors two potential lottery-like gains. One is potentially huge first day returns as Chinese issuers leave more...

This paper examines how the difference in institutional environment across various provinces in China can explain IPO underpricing in the Chinese equity market. Using Chinese IPO data from 1999 to 2007, we find strong evidence that firms located in regions with better institutional environment...

Chinese IPOs offer investors two potential lottery-like gains. One is huge first day returns as Chinese issuers leave more money on the table than other issuers and the other is that a particular IPO may go on to become the next Alibaba in the long run. Using a sample of 862 book-built Chinese...

This paper examines the cross-sectional determinants of post-IPO long-term stock returns in China. We document that the aftermarket P/E ratio has the most robust negative association with post-IPO stock returns. The negative relation indicates that the market corrects the aftermarket...

We examine two inconclusive issues in the IPO underpricing literature. It is unclear if private firms or government-owned firms (SOEs) underprice their IPOs more and how institutional environment affects IPO underpricing. Using a much larger China IPO sample of SOEs, we conclude that SOEs...

We examine the effects of venture capitalist participation in IPOs in China and find that VC-backed firms are more underpriced than non-VC firms. Both VC-backed and non-VC-backed IPOs experience long-run underperformance; however, VC-backed IPOs perform significantly better. The higher level of...

Based on a database of 200 listed firms from the Growth Enterprise Market of China, this paper employs regression models to investigate the significance of IPO capital expenditure to firms’ operating performance. It suggests that a vast majority of pre-IPO money is spent on business...

This study examines the impact of underwriter reputation on IPO underpricing and long-run performance in the China stock market over the period 2001 to 2006. This sample period is notable for the implementation of a verification and approval system that occurred during it, which provided...

This paper examines the relationship between ownership structures and IPO long-run performance in China. Although entrepreneurial firms underperform the market in general after IPO but the poor performance is mainly caused by the IPOs with ownership control wedge. Entrepreneurial firms with one...