Privatization Effect Versus Listing Effect: Evidence from China

56 Pages Posted: 17 Aug 2015 Last revised: 22 Aug 2020

See all articles by Bo Li

Bo Li

Shantou University

William L. Megginson

University of Oklahoma

Zhe Shen

Xiamen University

Qian Sun

Fudan University

Multiple version iconThere are 2 versions of this paper

Date Written: November 7, 2015


Previous studies show that profitability does not improve after share issue privatization (SIP) in China. We explore the possibility that the positive privatization effect can be overwhelmed by a negative listing effect, leading to an overall negative or insignificant SIP profitability change. Using the difference-in-differences approach with various matched samples, we show that there is a positive privatization effect and there is a negative listing effect on profitability. We also document evidence of a significant improvement in profitability after separating the “pure” privatization effect from the SIP effect. Our findings are robust to alternative variable specifications and methodological changes.

Keywords: Privatization, International financial markets, Government policy and regulation

JEL Classification: G32, G38, G15

Suggested Citation

Li, Bo and Megginson, William L. and Shen, Zhe and Sun, Qian, Privatization Effect Versus Listing Effect: Evidence from China (November 7, 2015). Pacific-Basin Finance Journal, Vol. 56, 2019, Available at SSRN: or

Bo Li

Shantou University ( email )

243 Daxue Road
Shantou, Guangdong, Guangdong 515063

William L. Megginson

University of Oklahoma ( email )

307 W Brooks, 205A Adams Hall
Norman, OK 73019
United States
(405) 325-2058 (Phone)
(405) 325-1957 (Fax)


Zhe Shen (Contact Author)

Xiamen University ( email )

School of Management
422 Siming South Road
Xiamen, Fujian 361005

Qian Sun

Fudan University ( email )

No. 670, Guoshun Road
No.670 Guoshun Road
Shanghai, 200433
86 21 25011094 (Phone)

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