The pricing and performance of IPOs in China’s poor counties

In the context of China’s drive to alleviate poverty, we focus on the initial public offering (IPO) firms located in China’s poor counties and investigate their IPO pricing and post-IPO performance. Contrary to the findings reported for the U.S., we find that the problem of information asymmetry bet...

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Autores principales:	Chao Yan, Jiaxin Wang
Formato:	article
Lenguaje:	EN
Publicado:	Elsevier 2021
Materias:	Poor counties IPO pricing Performance Information asymmetry Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/5390626148aa464db193139a44f761be
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spelling	oai:doaj.org-article:5390626148aa464db193139a44f761be2021-11-26T04:25:53ZThe pricing and performance of IPOs in China’s poor counties1755-309110.1016/j.cjar.2021.100205https://doaj.org/article/5390626148aa464db193139a44f761be2021-12-01T00:00:00Zhttp://www.sciencedirect.com/science/article/pii/S1755309121000472https://doaj.org/toc/1755-3091In the context of China’s drive to alleviate poverty, we focus on the initial public offering (IPO) firms located in China’s poor counties and investigate their IPO pricing and post-IPO performance. Contrary to the findings reported for the U.S., we find that the problem of information asymmetry between Chinese firms located in rural areas and their investors is so severe that these IPO firms are associated with significantly higher underpricing. This effect is more pronounced for firms located in rural areas with poor traffic systems. We do not find significant market performance differences between rural and urban firms after their IPOs, but the operating performance of rural firms improves in the short term. Our additional analyses indicate that rural IPO firms have significantly lower investor attention and higher agency costs than urban firms. Overall, we enrich the literature on IPO pricing and the economic effects of geographic location.Chao YanJiaxin WangElsevierarticlePoor countiesIPO pricingPerformanceInformation asymmetryAccounting. BookkeepingHF5601-5689ENChina Journal of Accounting Research, Vol 14, Iss 4, Pp 100205- (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Poor counties IPO pricing Performance Information asymmetry Accounting. Bookkeeping HF5601-5689
spellingShingle	Poor counties IPO pricing Performance Information asymmetry Accounting. Bookkeeping HF5601-5689 Chao Yan Jiaxin Wang The pricing and performance of IPOs in China’s poor counties
description	In the context of China’s drive to alleviate poverty, we focus on the initial public offering (IPO) firms located in China’s poor counties and investigate their IPO pricing and post-IPO performance. Contrary to the findings reported for the U.S., we find that the problem of information asymmetry between Chinese firms located in rural areas and their investors is so severe that these IPO firms are associated with significantly higher underpricing. This effect is more pronounced for firms located in rural areas with poor traffic systems. We do not find significant market performance differences between rural and urban firms after their IPOs, but the operating performance of rural firms improves in the short term. Our additional analyses indicate that rural IPO firms have significantly lower investor attention and higher agency costs than urban firms. Overall, we enrich the literature on IPO pricing and the economic effects of geographic location.
format	article
author	Chao Yan Jiaxin Wang
author_facet	Chao Yan Jiaxin Wang
author_sort	Chao Yan
title	The pricing and performance of IPOs in China’s poor counties
title_short	The pricing and performance of IPOs in China’s poor counties
title_full	The pricing and performance of IPOs in China’s poor counties
title_fullStr	The pricing and performance of IPOs in China’s poor counties
title_full_unstemmed	The pricing and performance of IPOs in China’s poor counties
title_sort	pricing and performance of ipos in china’s poor counties
publisher	Elsevier
publishDate	2021
url	https://doaj.org/article/5390626148aa464db193139a44f761be
work_keys_str_mv	AT chaoyan thepricingandperformanceofiposinchinaspoorcounties AT jiaxinwang thepricingandperformanceofiposinchinaspoorcounties AT chaoyan pricingandperformanceofiposinchinaspoorcounties AT jiaxinwang pricingandperformanceofiposinchinaspoorcounties
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The pricing and performance of IPOs in China’s poor counties

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