Does the reform of the IPO pricing affect M&A?

Huiqiang Wang and Xinjian Shao

Finance Research Letters, 2022, vol. 50, issue C

Abstract: This study investigates the effect of the reform of IPO pricing on M&A using a sample of Chinese listed companies during the period 2006-2019. We find that companies listed in the IPO pricing marketization stage raise more funds and their financing constraints are eased, which increases the possibility and frequency of M&A after listing, and the scale of M&A also increases significantly. The market performance of M&A is better for companies listed in the pricing marketization stage. The above conclusions still hold after a series of robustness tests. Further, we identify that the relationship is more pronounced in high external financing dependent enterprises and non-state-owned companies. Overall, this paper can provide implications for better driving the reform of the IPO pricing.

Keywords: IPO; M&A; IPO pricing; Financial regulation (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:50:y:2022:i:c:s1544612322004159

DOI: 10.1016/j.frl.2022.103210

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