 IPO suspensions and labor employment decisions: Evidence from ChinaYanchun Xia, Yu Liu, Shijun Guo and Yufeng Xia Research in International Business and Finance, 2024, vol. 70, issue PB Abstract: The Chinese regulator occasionally suspends all initial public offerings (IPOs) to maintain stability in the capital markets and facilitate capital market reform. These suspensions temporarily prevent firms that have obtained IPO approval from going public. We hypothesize that this suspension-induced listing delay influences firms’ labor employment decisions. Consistent with this argument, we find that a suspension-induced listing delay is associated with an increase in labor costs, both in terms of total and average employee payments. This positive relationship is more pronounced for human capital-intensive firms and non-state-owned enterprises. We also find that there is an increase in employment and employee turnover for firms facing suspension-induced listing delays. Moreover, IPO suspensions result in lower labor productivity and firm performance. Overall, our results indicate that government policy uncertainty leads firms to incur high labor costs and reduces capital allocation efficiency. Keywords: Government policy; Policy uncertainty; IPO suspensions; Labor costs (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:70:y:2024:i:pb:s0275531924001673 DOI: 10.1016/j.ribaf.2024.102374 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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