IPO underpricing in the Chinese A-share market: Winner’s curse and ex ante uncertainty
A large number of researches shows that Initial Public Offerings (IPOs) of common stocks are systematically priced at a discount to their initial trading price. The large underpricing magnitude in the Chinese IPO market has drawn much attention. In this paper, A-share initial public offerings (IPOs)...
| Main Author: | |
|---|---|
| Format: | Dissertation (University of Nottingham only) |
| Language: | English |
| Published: |
2017
|
| Online Access: | https://eprints.nottingham.ac.uk/45945/ |
| _version_ | 1848797224562065408 |
|---|---|
| author | Zhang, Wenlu |
| author_facet | Zhang, Wenlu |
| author_sort | Zhang, Wenlu |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | A large number of researches shows that Initial Public Offerings (IPOs) of common stocks are systematically priced at a discount to their initial trading price. The large underpricing magnitude in the Chinese IPO market has drawn much attention. In this paper, A-share initial public offerings (IPOs) were 36.6458% underpriced from 2010 to 2016.
I consider two hypotheses might explain the IPO underpricing in Chinese primary market, namely winner’s curse and ex ante uncertainty. By examining the hypothesis and finding that there is a strong positive correlation between the market-adjusted returns that are required for new stock issues and the degree of ex ante uncertainty associated with the IPO. I conclude that the cross-section pattern of underpricing can be explained in terms of winner’s curse theory and ex ante uncertainty. |
| first_indexed | 2025-11-14T20:00:29Z |
| format | Dissertation (University of Nottingham only) |
| id | nottingham-45945 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T20:00:29Z |
| publishDate | 2017 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-459452018-04-17T15:13:52Z https://eprints.nottingham.ac.uk/45945/ IPO underpricing in the Chinese A-share market: Winner’s curse and ex ante uncertainty Zhang, Wenlu A large number of researches shows that Initial Public Offerings (IPOs) of common stocks are systematically priced at a discount to their initial trading price. The large underpricing magnitude in the Chinese IPO market has drawn much attention. In this paper, A-share initial public offerings (IPOs) were 36.6458% underpriced from 2010 to 2016. I consider two hypotheses might explain the IPO underpricing in Chinese primary market, namely winner’s curse and ex ante uncertainty. By examining the hypothesis and finding that there is a strong positive correlation between the market-adjusted returns that are required for new stock issues and the degree of ex ante uncertainty associated with the IPO. I conclude that the cross-section pattern of underpricing can be explained in terms of winner’s curse theory and ex ante uncertainty. 2017-09-13 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en https://eprints.nottingham.ac.uk/45945/1/final%20dissertation90.pdf Zhang, Wenlu (2017) IPO underpricing in the Chinese A-share market: Winner’s curse and ex ante uncertainty. [Dissertation (University of Nottingham only)] |
| spellingShingle | Zhang, Wenlu IPO underpricing in the Chinese A-share market: Winner’s curse and ex ante uncertainty |
| title | IPO underpricing in the Chinese A-share market: Winner’s curse and ex ante uncertainty |
| title_full | IPO underpricing in the Chinese A-share market: Winner’s curse and ex ante uncertainty |
| title_fullStr | IPO underpricing in the Chinese A-share market: Winner’s curse and ex ante uncertainty |
| title_full_unstemmed | IPO underpricing in the Chinese A-share market: Winner’s curse and ex ante uncertainty |
| title_short | IPO underpricing in the Chinese A-share market: Winner’s curse and ex ante uncertainty |
| title_sort | ipo underpricing in the chinese a-share market: winner’s curse and ex ante uncertainty |
| url | https://eprints.nottingham.ac.uk/45945/ |