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The Long-run Performance of Initial Public Offerings in China

Author

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  • Xia Xinping

    (Huazhong University of Science and Technology, Wuhan, Hubei, P.R. China, 430074 E-mail: xpxia 654@public.wh.hb.cn)

  • Wang Yixia

    (Huazhong University of Science and Technology, Wuhan, Hubei, P.R. China, 430074 E-mail: xpxia 654@public.wh.hb.cn)

Abstract

This article is an empirical study on the long-run performance of Initial Public Offerings (IPOs) in China, using a sample of 146 A-share firms who made their initial offerings within July 1997 and December 1998. The results show that IPOs in China outperform the market both in the short run and in the long run, with adjusted initial returns of 116.35 per cent and 3-year cumulative adjusted returns of 25.91 per cent. Further investigation shows that the size effect, the investors' long-existing overreaction and the specu lative bubbles in the market can be explanations for the short-run and long- run outperformance of IPOs.

Suggested Citation

  • Xia Xinping & Wang Yixia, 2003. "The Long-run Performance of Initial Public Offerings in China," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 2(2), pages 181-205, May.
    • Handle: RePEc:sae:emffin:v:2:y:2003:i:2:p:181-205
    DOI: 10.1177/097265270300200203
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    References listed on IDEAS

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    6. Loughran, Tim & Ritter, Jay R, 1995. "The New Issues Puzzle," Journal of Finance, American Finance Association, vol. 50(1), pages 23-51, March.
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    Cited by:

    1. S. M. Locke & Kartick Gupta, 2009. "The return to initial public offerings: a Sino-Indian comparison," Venture Capital, Taylor & Francis Journals, vol. 11(3), pages 255-277, February.
    2. Joanna Lizińska & Leszek Czapiewski, 2018. "Towards Economic Corporate Sustainability in Reporting: What Does Earnings Management around Equity Offerings Mean for Long-Term Performance?," Sustainability, MDPI, vol. 10(12), pages 1-23, November.

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