The Chinese IPO Examination Mechanism Affected by Administrative Factors: New Evidence from Rejected IPO Firms
Journal of Economic Research, 19(2), 171-196
25 Pages Posted: 1 Sep 2014
Date Written: August 31, 2014
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.
Keywords: Chinese Stock Market, IPO examination mechanism, administrative factors, rejected IPO firms
JEL Classification: G11, G15, G18
Suggested Citation: Suggested Citation