An Empirical Investigation of Underpricing in Chinese IPOs
نویسندگان
چکیده
We study the underpricing of Chinese IPOs, using data of 308 flrm-commitment new issues. We flnd that underpricing can be explained in terms of a separating equilibrium under asymmetric information in which underpricing is a strategy for flrms to signal their value to investors. We show that bribery is an unlikely cause of the high IPO underpricing observed in the Chinese data. We also investigate the hypothesis that various lottery mechanisms for allocation of IPO shares have exacerbated underpricing. Finally, we flnd that difierences in initial returns between A and B shares can be explained by the difierences in domestic and foreign investor’s investment opportunities and investment sentiments. An Empirical Investigation of Underpricing in Chinese IPOs
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تاریخ انتشار 1997