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Does IFRS reduce IPO underpricing? evidence from China

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  • Tsai, Yu Ling
  • Huang, Hua-Wei

Abstract

In this study, we examine whether the adoption of convergent-IFRS in China reduces IPO underpricing, which is of interest to investors and regulators. Using panel data from 2,666 non-financial IPOs of A-shares listed on the Shanghai and Shenzhen Stock Exchanges between 1996 and 2019, the study shows that the adoption of convergent-IFRS mitigates the phenomenon of IPO underpricing in China and this transition benefit is not moderated by the proportion of SOEs. We fill the gap in the literature with a contribution to global evidence on the adoption of IFRS standards.

Suggested Citation

  • Tsai, Yu Ling & Huang, Hua-Wei, 2021. "Does IFRS reduce IPO underpricing? evidence from China," Finance Research Letters, Elsevier, vol. 40(C).
    • Handle: RePEc:eee:finlet:v:40:y:2021:i:c:s1544612319303526
    DOI: 10.1016/j.frl.2020.101673
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    References listed on IDEAS

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    4. Cheung, Yan-leung & OUYANG, Zhiwei & TAN, Weiqiang, 2009. "How regulatory changes affect IPO underpricing in China," China Economic Review, Elsevier, vol. 20(4), pages 692-702, December.
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    Cited by:

    1. Xu, Runguo & Dong, Peng, 2023. "Underwriter reputation and asset-backed securitization pricing," Finance Research Letters, Elsevier, vol. 58(PB).

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    More about this item

    Keywords

    IFRS; IPO underpricing; China; Information asymmetry;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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