The registration-based IPO reform and the cost of equity capital: evidence from China

Qinyang Li, Liping He, Xiao Gou and Yao Ren

Finance Research Letters, 2024, vol. 67, issue PA

Abstract: This paper investigates the impact of the registration-based IPO reform on firms’ cost of equity capital using samples of Chinese A-share listed firms. The results indicate that registration-based IPO reform significantly reduces the cost of equity capital. This effect is mainly observed in firms with higher-reputation underwriters, higher intensity of review inquiries, or higher institutional ownership. In addition, the mechanisms driving these reductions are enhanced information disclosure and improved IPO pricing efficiency.

Keywords: Cost of equity capital; Registration-based system; IPO (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pa:s1544612324008201

DOI: 10.1016/j.frl.2024.105790

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