Tolls on Entrepreneurs from Capital Market Distortions: Evidence from IPO Locational Choices

Qu Feng, Shang-Jin Wei, Guiying Laura Wu and Mengying Yuan

No 34341, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Capital controls and other policy distortions in the capital market are costly to entrepreneurs. We propose a structural estimation approach to quantify the effect using IPO locational choices. We estimate the willingness-to-pay to bypass these distortions by the Chinese entrepreneurs with overseas listed firms to be a haircut in firm value by 50-60%. We infer that the welfare for the entrepreneurs could rise by 22% from the relevant capital market reforms.

JEL-codes: F30 O16 (search for similar items in EconPapers)
Date: 2025-10
New Economics Papers: this item is included in nep-cna and nep-fdg
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