Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5088219 | Journal of Banking & Finance | 2017 | 17 Pages |
Abstract
Using a sample of Chinese Initial Public Offerings (IPOs) from 2006 to 2011, we document that politically connected (PC) underwriters increase the likelihood of clients' IPO applications being approved by the Chinese Securities Regulatory Commission (CSRC). We further show that PC underwriters charge premium underwriting fees. Consistent with the rent-seeking argument, we find that minority shareholders' interests may be impaired as indicated by post-IPO underperformance. We do not detect significant differences in the underpricing of IPO deals underwritten by PC versus non-PC investment banks.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Donghua Chen, Yuyan Guan, Tianyu Zhang, Gang Zhao,