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Price deregulation and investors’ IPO speculation: Evidence from Chinese registration system reform

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  • Tang, Siyuan
  • Luo, Runmei

Abstract

This study assesses the impact of market-oriented reforms of the Chinese initial public offering (IPO) system on investor speculation. The empirical results reveal that the registration-based IPO system reform expedites the release of investor sentiment and curbs speculation in the post-IPO period. The registration reform in the Sci-Tech Innovation Board (STAR market) is more effective than that in the Growth Enterprise Market (GEM), and the long-term effects surpass the short-term effects. Further tests indicate that greater institutional (individual) investor participation is the reason for higher (lower) reform efficiency; as investor sentiment increases, the dampening effect of the registration system reform on speculation decreases. Our study confirms the importance of market-oriented reform and provides implications for implementing efficient reforms in emerging markets with high levels of manipulation and speculation.

Suggested Citation

  • Tang, Siyuan & Luo, Runmei, 2024. "Price deregulation and investors’ IPO speculation: Evidence from Chinese registration system reform," Research in International Business and Finance, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:riibaf:v:71:y:2024:i:c:s0275531924002861
    DOI: 10.1016/j.ribaf.2024.102493
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