An empirical analysis on the relationship between IPO waves and market timing on the basis of product market competition in China

Since IPO waves was firstly proposed by Ibbotson& Jaffe (l975) and Ritter (1984), many scholars has analyzed it, combining with market timing. However, few of them used models or did empirical analysis on the basis of product market. Till Chemmanur&Jie He (2009) who studied the IPO waves on the product market shows us a new approach to analyze IPO waves. Thus, this paper will build a modified model on product market, which takes the policy factor in China into consideration and gives several propositions. Moreover, based on the manufacturing firms listed in A share market of Shanghai and Shenzhen securities market from July of 1999 to December of 2009, we examined hypotheses and that whether there are IPO waves in china manufacturing or not. Besides, we solve the optimal timing of going public after comparing the benefit of going public and issuing cost.