Initial Public Offering and Corporate Governance in China's Transitional Economy
Initial Public Offering and Corporate Governance in China's Transitional Economy
This chapter empirically examines the performance of Chinese initial public offerings (IPOs). The sample consists of 437 companies listed on the Shanghai Stock Exchange, and 447 companies listed on the Shenzhen exchange (for a longer time period) from 1995 to 1999. The chapter is organized as follows. Section 7.2 discusses the equity structure and corporate governance mechanism. Section 7.3 establishes financial indicators to evaluate the operational performance of listed companies. Section 7.4 reports the empirical results of the IPOs' performance, and Section 7.5 provides concluding remarks. The results show that in terms of growth, profitability, and stability, the only industries in China in which listed companies display strong performance are the public utilities, transportation, and finance. The overall operational performance of all other industries is poor, especially in terms of growth. Two commentaries are also included at the end of the chapter.
Keywords: Chinese firms, IPO, going public, corporate governance, listed companies
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