Impact of Registration System Reform on IPO Pricing Efficiency in China’s Capital Market

Jiayi Lyu ()
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Jiayi Lyu: Nankai University, Department of Business

A chapter in Proceedings of the 2022 International Conference on Economics, Smart Finance and Contemporary Trade (ESFCT 2022), 2022, pp 1169-1178 from Springer

Abstract: Abstract Since 2019, China’s registration-based reform has continuously advanced, leading to a more market-oriented approach to IPO pricing. However, there is little agreement on whether IPO pricing efficiency has improved. As a result, this research compiles IPO data from 354 businesses listed in the GEM and 119 companies listed in the STAR market to assess IPO pricing efficiency before and after registration system reform using the stochastic frontier model. According to the study, GEM’s IPO pricing efficiency was 80.83% in the first year after the registration system was implemented and increased to 84.75% in the following year. This was lower than it had been before the registration system reform but higher than the IPO pricing efficiency of the STAR market. This essay examines the institutional investors, information disclosure, and IPO inquiry process as causes of the reduction in efficiency and makes three recommendations that are each comparable to each.

Keywords: IPO; Pricing efficiency; Stochastic frontier analysis (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-052-7_131

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DOI: 10.2991/978-94-6463-052-7_131

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