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Political economy of IPO underpricing: the evidence from China
This paper looks at the IPO underpricing puzzle in a political economy perspective, as previous theories have considered only the ‘market economy factor’ in IPO underpricing, and failed to incorporate the ‘political economy factor’ in determining IPO underpricing. This is particularly relevant to emerging markets such as China, where the IPO is not only a process of raising fresh capital, but also one of privatisation. By examining the Chinese case with the political economy perspective, we find that the IPO underpricing is negatively related to the proportion of the shares held by various government organisations. We also offer explanations using an angle of political economy
History
Publication status
- Published
Journal
Journal of Chinese Economic and Business StudiesISSN
1476-5284Publisher
Taylor & Francis (Routledge)External DOI
Issue
2Volume
10Page range
111-129Department affiliated with
- Business and Management Publications
Full text available
- No
Peer reviewed?
- Yes