Competitive Effects of IPOs: Evidence from Chinese Listing Suspensions

Frank Packer and Mark Spiegel

Journal of Money, Credit and Banking, 2024, vol. 56, issue 8, 2137-2169

Abstract: Theory suggests that initial public offerings (IPOs) can adversely impact listed firms, both directly by increasing intraindustry competition, and indirectly by completing related asset market spaces. However, the endogeneity of individual IPO activity hinders testing these channels. This paper examines listing suspensions in China in a panel specification that accounts for macro‐economic and financial conditions, isolating the firm‐level IPO impact. We identify the competitive impact of listing suspensions through the value share of postponed firms in the IPO queue in their industry, and asset‐space competition by firms' historical covariance with a synthetic portfolio of listed firms with the IPO queue industry mix at the time of suspension. Our results support the predicted IPO effects through both channels. We also document heterogeneity in IPO effects. Stronger firms, measured through a variety of proxies, benefit less from the suspension news. These results are robust to a battery of sensitivity tests.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/jmcb.13043

Related works:
Working Paper: Competitive effects of IPOs: evidence from Chinese listing suspensions (2020)
Working Paper: Competitive Effects of IPOS: Evidence from Chinese Listing Suspensions (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:56:y:2024:i:8:p:2137-2169

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley Content Delivery ().