Conflicts of interest and China's A-share underpricing Gannon, Gerard and Zhou, Yuwei 2008, Conflicts of interest and China's A-share underpricing, International review of financial analysis, vol. 17, no. 3, pp. 491-506, doi: 10.1016/j.irfa.2007.05.002. Attached Files Name Description MIMEType Size Downloads Title Conflicts of interest and China's A-share underpricing Author(s) Gannon, Gerard Zhou, Yuwei Journal name International review of financial analysis Volume number 17 Issue number 3 Start page 491 End page 506 Publisher Elsevier B.V. Place of publication Amsterdam, Netherlands Publication date 2008-06 ISSN 1057-5219 1873-8079 Keyword(s) Chinese IPO underpricing regulation Summary The extremely high A-share underpricing in China's primary market provides us with a very interesting area of empirical research. Previous studies on China's IPO underpricing have been suggestive, but inconclusive. A significant decline in A-share underpricing is found in 2003 relative to previous years (and much less than that recorded in the literature to date). We examine the validity of previous A-share underpricing models, reported in the literature, and find a statistically significant structural break in the data during 2003 when these models are specified. We further explore conflicts of interest in the Chinese IPO market and specify an alternative model to further examine this change in observed market behavior. Our results suggest that a contract with high underwriter's fee leads to less A-share underpricing. Our results also suggest that the asymmetric information hypothesis does not apply in the Chinese IPO market in 2003. Overpricing by the secondary market and the trading activity on the first trading day are the main functions of the A-share underpricing. This study has important implications such as guiding the Chinese government policy regarding the regulations of initial public offering. Language eng DOI 10.1016/j.irfa.2007.05.002 Field of Research 150201 Finance HERDC Research category C1 Refereed article in a scholarly journal Copyright notice ©2007, Elsevier Inc Persistent URL http://hdl.handle.net/10536/DRO/DU:30017210 Document type: Journal Article Collections: Faculty of Business and Law School of Accounting, Economics and Finance Related Links Link Description Connect to published version (restricted access) Go to link with your DU access privileges     Unless expressly stated otherwise, the copyright for items in DRO is owned by the author, with all rights reserved. Versions Version Filter Type Fri, 14 Aug 2009, 13:50:53 EST Mon, 14 Dec 2009, 10:44:51 EST Mon, 14 Dec 2009, 10:46:06 EST Tue, 11 May 2010, 11:15:21 EST Tue, 11 May 2010, 11:20:26 EST Mon, 16 Jun 2014, 11:36:19 EST Fri, 06 Feb 2015, 10:25:48 EST Filtered Full Citation counts:   Cited 0 times in TR Web of Science Cited 18 times in Scopus Search Google Scholar Access Statistics: 520 Abstract Views, 5 File Downloads  -  Detailed Statistics Created: Fri, 14 Aug 2009, 13:50:53 EST