The economic benefits of returned-global Chinese IPOs

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

doi:10.1007/s11156-020-00873-1

The economic benefits of returned-global Chinese IPOs

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

Research output: Journal article publication › Journal article › Academic research › peer-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 language	English
Pages (from-to)	1207-1239
Number of pages	33
Journal	Review of Quantitative Finance and Accounting
Volume	55
Issue number	4
DOIs	https://doi.org/10.1007/s11156-020-00873-1
Publication status	Published - 1 Nov 2020

Keywords

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

ASJC Scopus subject areas

Accounting
General Business,Management and Accounting
Finance

More information

10.1007/s11156-020-00873-1

http://hdl.handle.net/10397/81982

Cite this

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The economic benefits of returned-global Chinese IPOs

Abstract

Keywords

ASJC Scopus subject areas

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