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Superstition-driven IPO anomaly: Chinese almanac evidence

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  • Zhang, Wei
  • Guo, Yiling
  • Li, Chunxia
  • Wang, Guanying

Abstract

Cultural superstition embedded in the Chinese almanac generates a systematic yet transient anomaly in financial markets. We develop a sentiment-decay model that formalizes the full dynamic of this mispricing, from initial underreaction through delayed arbitrage to complete long-run reversal. Analyzing 3624 initial public offerings (IPOs) from 2001 to 2022, we document a significant short-term discount for firms listing on inauspicious days. This discount fully reverses within three years, consistent with a sentiment-driven underreaction distinct from firm fundamentals and robust to endogeneity in listing date selection. We further show that market frictions moderate the anomaly by affecting both the depth of the initial discount and the pace of correction, yet never prevent its ultimate reversal. Our findings thus characterize deep-seated cultural beliefs as a self-correcting market friction, reconciling behavioral biases with long-run market efficiency.

Suggested Citation

  • Zhang, Wei & Guo, Yiling & Li, Chunxia & Wang, Guanying, 2026. "Superstition-driven IPO anomaly: Chinese almanac evidence," Finance Research Letters, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:finlet:v:91:y:2026:i:c:s1544612325026893
    DOI: 10.1016/j.frl.2025.109440
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