The economic benefits of returned-global Chinese IPOs

Jerry W. Chen, In Mu Haw, Jianfu Shen, Pauline W. Wong

Research output: Journal article publicationJournal articleAcademic researchpeer-review

Abstract

On June 6, 2018, China has adopted a new policy that allows overseas-listed Chinese companies to launch secondary listings (hereafter, returned-global Chinese IPOs) in the domestic market. This study examines how the returned-global Chinese IPOs affect financial reporting quality, information environments, and IPO pricing in the domestic market. We find that these newly public companies in China exhibit lower discretionary accruals (and their components), lower stock price synchronicity, and lower first-day underpricing upon IPOs. Our difference-in-differences tests reveal that IFRS convergence in China mitigates overseas listing advantage of the returned-global firms. Overall, this study highlights the economic benefits of overseas listing of the returned-global Chinese IPOs and the impact of the change in financial accounting standards on the IPO market. Our evidence highlights the bright side of the recent regulatory change in China.

Original languageEnglish
JournalReview of Quantitative Finance and Accounting
DOIs
Publication statusAccepted/In press - 2020

Keywords

  • An emerging market
  • Earnings quality
  • Globalization
  • IFRS
  • Initial public offerings
  • IPO underpricing
  • Stock price synchronicity

ASJC Scopus subject areas

  • Accounting
  • Business, Management and Accounting(all)
  • Finance

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