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

See all articles by Hai Long

Hai Long

Edith Cowan University

Zhaoyong Zhang

Edith Cowan University - Faculty of Business and Law

Date Written: August 31, 2014

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.

Keywords: Chinese Stock Market, IPO examination mechanism, administrative factors, rejected IPO firms

JEL Classification: G11, G15, G18

Suggested Citation

Long, Hai and Zhang, Zhaoyong, The Chinese IPO Examination Mechanism Affected by Administrative Factors: New Evidence from Rejected IPO Firms (August 31, 2014). Journal of Economic Research, 19(2), 171-196. Available at SSRN: https://ssrn.com/abstract=2489553

Hai Long (Contact Author)

Edith Cowan University ( email )

270 Joondalup Drive
Joondalup
Perth, WA 6012
Australia

Zhaoyong Zhang

Edith Cowan University - Faculty of Business and Law ( email )

Accounting, Finance and Economics
100 Joondalup Drive
Joondalup 6027, WA 6027
Australia

HOME PAGE: http://www.ecu.edu.au/staffdir/details.fcgi?ref=odrrfgSFeI.

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