IPO Reform and Venture Capital: Evidence from China”

Yue Fei, Ulrich Hege and Xiao Jia

No 26-1732, TSE Working Papers from Toulouse School of Economics (TSE)

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 postIPO 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)
Date: 2026-04
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-cna, nep-ent, nep-sbm and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:131666

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