Political connections and the long-term stock performance of Chinese IPOs

Jianlei Liu, Konari Uchida and Ruidong Gao

Journal of International Financial Markets, Institutions and Money, 2012, vol. 22, issue 4, 814-833

Abstract: We analyse the long-term stock performance of Chinese initial public offerings (IPOs) between the years of 2000 and 2007. The results reveal that firms with political connections experience better long-term stock performance. Our results suggest that the abolition of the Issuance Quota System and Channel Restriction System has a negative influence on the long-term performance of IPOs. This evidence is consistent with the view that local government officials are likely to select politically connected companies to go public.

Keywords: Initial public offerings; Long-term underperformance; Political connections; Regulations; China (search for similar items in EconPapers)
JEL-codes: G32 G34 G38 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (29)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:22:y:2012:i:4:p:814-833

DOI: 10.1016/j.intfin.2012.05.005

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