Is There Any Life After Going Public?Evidence from the Canadian Market

2005 ◽  
Vol 8 (3) ◽  
pp. 30-40 ◽  
Author(s):  
Narjess Boubakri ◽  
Maher Kooli ◽  
Jean-François L'her
Keyword(s):  
Going Public ◽  
Canadian Market ◽  
Public Evidence

scholarly journals Government control and the higher costs of going public: Evidence from a new stock market in China

2008 ◽  
Vol 6 (1) ◽  
pp. 9-15
Author(s):  
Nobuyuki Teshima ◽  
Katsushi Suzuki ◽  
Keyword(s):  
Stock Market ◽  
Indirect Cost ◽  
Direct Costs ◽  
Government Control ◽  
Ipo Underpricing ◽  
Chinese Firms ◽  
Going Public ◽  
Regulatory Authorities ◽  
Public Evidence

IPO underpricing or the indirect cost of going public is extremely high in China. We hypothesize that government control over the corporate economy underlies this puzzle. Specifically, bureaucratic managers in state-owned firms as well as regulatory authorities have incentives to underprice. Using a sample of a new stock market in China, we find evidence supporting this hypothesis. Underpricing is higher for state-owned firms and for IPOs before the reform making IPO prices less affected by the regulator. Furthermore, we find that the reduction in underpricing or indirect cost by the reform more than offsets the increase in direct costs for compensating underwriters‟ higher efforts. Overall, the reform making IPO process more market-oriented is beneficial to Chinese firms going public

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