Market-based Financing Reforms and Shareholder Valuations: Event Study Evidence from the Chinese Science and Technology Innovation Board

Yaohua Qin, He Xiao and Yifei Zhang

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies the impact of the newly introduced science and technology innovation board (STIB) on stock valuations in China. This Nasdaq-style board features a market-based IPO system that contrasts with the current approved-based arrangement. Event study approach shows that A-share firms pertaining to STIB related industries increased significantly after the reform announcement. The effect is stronger for Non-SOEs and firms with higher R&D capacity. Public shareholders of the firms filing STIB IPO applications experienced salient growth in their abnormal returns while their industry competitors suffered price drops. Financial analysts also broadened their company coverages in STIB related industries and revised their market valuation forecasts positively in line with the market investors.

Keywords: China's financial reform; Registration-based IPO system; Science and technology innovation board in China; Chinese financial markets. (search for similar items in EconPapers)
JEL-codes: G18 G38 N25 O16 (search for similar items in EconPapers)
Date: 2019-05-19
New Economics Papers: this item is included in nep-cfn, nep-cna, nep-ino and nep-tra
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https://mpra.ub.uni-muenchen.de/94046/1/MPRA_paper_94046.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/94126/1/MPRA_paper_94126.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/95399/1/MPRA_paper_95399.pdf revised version (application/pdf)

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