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Ipo Underpricing And Information Quality Of Prospectuses

Author

Listed:
  • KUO ZHOU

    (School of Economics, Jilin University, Changchun, P. R. China)

  • BAICHENG ZHOU

    (School of Economics, Jilin University, Changchun, P. R. China†China Center for Public Sector Economy Research, Jilin University, P. R. China)

  • HUAXIAO LIU

    (#x2021;College of Computer Science and Technology, Jilin University, Changchun, P. R. China)

Abstract

Effective information disclosure is the cornerstone of sustainable operation of the capital market. In the IPO market, whether public information in the prospectus can be fully captured by investors largely depends on the quality of valuation-relevant information. Based on Chinese prospectuses, we create five unique indicators to measure the information quality and examine the relationship between information quality and IPO underpricing. We find that high quality of information disclosure results in less underpricing because they relieve serious information asymmetry between issuing companies and investors. We provide a new method to supervise and improve the quality of non-financial information disclosure.

Suggested Citation

  • Kuo Zhou & Baicheng Zhou & Huaxiao Liu, 2020. "Ipo Underpricing And Information Quality Of Prospectuses," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(06), pages 1559-1577, December.
    • Handle: RePEc:wsi:serxxx:v:65:y:2020:i:06:n:s0217590820500289
    DOI: 10.1142/S0217590820500289
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    Cited by:

    1. Kuo Zhou & Xianghui Jin & Xinru Li & Yunqing Tao, 2024. "Enhancing sustainable development through effective disclosure: Corporate environmental performance and readability," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 274-291, January.

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