Analysis on IPO Underpricing of Homebound Cross-listed Chinese A-shares Compared to Domestic A-shares (2006-2014)

ZHU, LINGYAO (2015) Analysis on IPO Underpricing of Homebound Cross-listed Chinese A-shares Compared to Domestic A-shares (2006-2014). [Dissertation (University of Nottingham only)]

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Abstract

This paper provides analysis on the IPO underpricing of homebound cross-listed IPOs compared to domestic IPOs in China. By investigating the market adjusted initial return of a total sample of 1205 observations, which includes 1165 A-shares and 40 homebound A-H shares during 2006-2014, we find that the phenomenon of IPO underpricing is still prevailing for homebound cross-listed IPOs.

This paper conducts the cross-sectional analysis and the sensitivity analysis by running multiple regressions and finds that cross-listing tends to have a weak negative effect on IPO underpricing in China during 2006-2014, meaning that the homebound cross-listed IPOs and domestic IPOs are mostly indifferent in the level of IPO underpricing. Additionally, we find that cross-listed IPOs benefit in gaining lower level of ex-ante uncertainty and they do not require deliberate underpricing to attract more investors, which are the main reasons explaining the weak influence of cross-listing on IPO underpricing of Chinese new stocks during 2006-2014.

Furthermore, this paper also provides evidences supporting the application of signaling theory, winners’ curse theory, informational cascades theory, the change of pricing mechanism hypothesis and secondary market effect hypothesis in China during this time period.

Item Type: Dissertation (University of Nottingham only)
Keywords: Cross-listing, IPO Underpricing, Chinese IPOs
Depositing User: ZHU, Lingyao
Date Deposited: 24 Mar 2016 09:37
Last Modified: 23 Oct 2016 17:57
URI: http://eprints.nottingham.ac.uk/id/eprint/29849

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