The Chinese IPO Examination Mechanism Affected By Administrative Factors: New Evidence From Rejected IPO Firms

Document Type

Journal Article

Publisher

Hanyang Economics Research Institute

Faculty

Faculty of Business and Law

School

School of Business

RAS ID

18696

Comments

Long, H. , & Zhang, Z. (2014). The Chinese IPO examination mechanism affected by administrative factors: New evidence from rejected IPO firms. Journal of Economic Research, 19(2), 171-195. Available here

Abstract

Administrative factors permeate the Chinese financial market. This study provides an insight into the emerging government-dominated IPO market. Using up-to-date data from 520 listed firms and 140 rejected IPO applicants in the Chinese stock market over 2006 to 2012, this study, based on prior analytical framework (Bhattacharya et al., 2010; Hearn, 2013), includes some IPO-related administrative factors into its multivariate regression model. It aims to examine, to some degree, these determinants affect the Chinese IPO examination mechanism. It suggests that the IPO probability is determined by selected administrative factors that are ultimately decided by the authorities, once the IPO applicants satisfy the minimum financial requirements. Those applicants with strong government background are more likely to pass the IPO examination.

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