IPO Underpricing and Long-Term Performance in China's A-Share Market

Linxuan Wang

doi:10.54097/xvsfvd52

Authors

Linxuan Wang

DOI:

https://doi.org/10.54097/xvsfvd52

Keywords:

IPO, A-Share Market, Long-Term Performance

Abstract

This paper aims to provide a comprehensive investigation into the phenomenon of IPO underpricing and its impact on long-term performance within China’s A-share market. By analyzing empirical data from 109 A-share companies listed between June 2006 and June 2007, the study finds that the average first-day return reaches an impressive 107%, while the cumulative abnormal returns (CAR) over one and three years post-IPO are -1.71% and -1.54%, respectively. Further econometric analyses identify market volatility, pre-IPO uncertainty, first-day turnover rate, and investor sentiment as significant factors affecting long-term IPO performance.

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References

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