IPO Reform and Venture Capital: Evidence from China

Celine (Yue) Fei (), Ulrich Hege () and Xiao Jia ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We study how IPO reforms transmit to venture capital (VC) markets using the introduction of China’s entrepreneurial boards, ChiNext and the registration-based STAR. We document that both boards attract younger, higher-growth firms with weaker fundamentals in levels, but post IPO growth persists for ChiNext firms while decelerating sharply for STAR firms. VC backing plays different roles across regimes: on ChiNext it aligns with valuation premia and long-run outperformance, whereas on STAR it mainly predicts higher first-day returns. To identify causal effects on VC allocation, we construct novel text-based regulatory exposure measures from listing documents using keyword matching and Sentence-BERT semantic similarity, and show that VC financing reallocates toward firms more aligned with “supported” activities.

Keywords: IPO Reforms; IPO Listing Requirements; Venture Capital; Business Description; BERT; China (search for similar items in EconPapers)
JEL-codes: G24 G28 (search for similar items in EconPapers)
Pages: 55
Date: 2026-03
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-cna, nep-ent, nep-fdg, nep-inv, nep-sbm and nep-sea
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