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Board characteristics and IPO underpricing in China: The perspective of moderating effect of venture capitalists

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  • Wang, Shuangjin
  • Wang, Puxuan
  • Cebula, Richard J.
  • Foley, Maggie

Abstract

Using a sample of 863 offerings on the ChiNext Market in China from 2009 through 2020, this study explores the roles of the board of directors and the moderating effects played by venture capitalists on IPO underpricing. The study finds that board reputation and board members’ experiences could lower the degree of IPO underpricing. There is a U-shaped relationship between IPO underpricing and board independence. The participation of venture capitalists tends to weaken the role of the board on reducing IPO underpricing. The ownership of venture capitalists has a modest impact on the relationship between IPO underpricing and board characteristics.

Suggested Citation

  • Wang, Shuangjin & Wang, Puxuan & Cebula, Richard J. & Foley, Maggie, 2023. "Board characteristics and IPO underpricing in China: The perspective of moderating effect of venture capitalists," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322006675
    DOI: 10.1016/j.frl.2022.103491
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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).
    2. Jun Qi & Qinwei Chi & Ni Yang & Junyan Ouyang, 2023. "The Impact of the Tone of a Prospectus on IPO Underpricing: Evidence from China," Australian Accounting Review, CPA Australia, vol. 33(4), pages 375-390, December.
    3. Wang, Jiaxin & Cheng, Ruonan & Huang, Yong & Yan, Chao, 2023. "The pre-IPO dividend and IPO underpricing: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).

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