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The registration-based IPO reform and the cost of equity capital: evidence from China

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  • Li, Qinyang
  • He, Liping
  • Gou, Xiao
  • Ren, Yao

Abstract

This paper investigates the impact of the registration-based IPO reform on firms’ cost of equity capital using samples of Chinese A-share listed firms. The results indicate that registration-based IPO reform significantly reduces the cost of equity capital. This effect is mainly observed in firms with higher-reputation underwriters, higher intensity of review inquiries, or higher institutional ownership. In addition, the mechanisms driving these reductions are enhanced information disclosure and improved IPO pricing efficiency.

Suggested Citation

  • Li, Qinyang & He, Liping & Gou, Xiao & Ren, Yao, 2024. "The registration-based IPO reform and the cost of equity capital: evidence from China," Finance Research Letters, Elsevier, vol. 67(PA).
    • Handle: RePEc:eee:finlet:v:67:y:2024:i:pa:s1544612324008201
    DOI: 10.1016/j.frl.2024.105790
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