Sponsor Co-investment, inquiry divergence, and IPO pricing efficiency

Xiuliang Dong, Yiqun Wang, Jiaming Zhang and Jianing Liu

Finance Research Letters, 2024, vol. 62, issue PA

Abstract: This paper measures the initial public offering (IPO) pricing efficiency of China's Sci-Tech Innovation Board and the growth enterprise market under the registration-based IPO system, with a novel focus on the mandatory sponsor co-investment system. Our findings reveal that this system improves IPO pricing efficiency and is crucial in mitigating capital constraints, overshadowing the influence of sponsor reputation. Additionally, the co-investment ratio reduces inquiry divergence among institutional investors, enhancing pricing efficiency. This study provides new insights into China's evolving IPO market dynamics and its regulatory mechanisms.

Keywords: Sponsor co-investment system; The co-investment ratio; IPO pricing efficiency; Inquiry divergence (search for similar items in EconPapers)
JEL-codes: C23 G11 G12 G14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:62:y:2024:i:pa:s1544612323013235

DOI: 10.1016/j.frl.2023.104951

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