The determinants and consequences of IPOs in a regulated economy: Evidence from China

Junxiong Fang, Haina Shi and Haoping Xu

Journal of Multinational Financial Management, 2012, vol. 22, issue 4, 131-150

Abstract: Using a sample of 156 monthly returns over the period of 1996–2008, we find a positive relation between the monthly issuing size and prior market returns, suggesting that the government decides the timing and the size of issuances based on prior market conditions. Different from previous findings, our study finds no evidence of decline in subsequent market returns after initial public offerings (IPOs). However, IPO issuance has a significantly negative impact on the return momentum effect, whereas the degree of impact is indifferent to the issuing size. We conclude that the overall mild impact on the subsequent market results from the government's regulation of the IPO market.

Keywords: Government regulation; IPO; Issuing size; Market return (search for similar items in EconPapers)
JEL-codes: G18 N2 P34 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:22:y:2012:i:4:p:131-150

DOI: 10.1016/j.mulfin.2012.06.002

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