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- Publisher
- Wiley
- Copyright
- © 2009 The Authors. Accounting and Finance © 2009 AFAANZ
- ISSN
- 0810-5391
- eISSN
- 1467-629X
- DOI
- 10.1111/j.1467-629X.2009.00333.x
- Publisher site
- See Article on Publisher Site
Abstract
This paper examines the cross‐sectional determinants of post‐IPO long‐term stock returns in China. We document that the aftermarket P/E ratio has the most robust negative association with post‐IPO stock returns. The negative relation indicates that the market corrects the aftermarket overvaluation of IPO firms in the long run. Underwriter reputation has a positive effect on post‐IPO stock returns, while board size has a negative impact, consistent with the views that reputable underwriters mitigate the information asymmetry in IPO pricing and over‐sized boards reduce the effectiveness of corporate governance. However, we find little evidence indicating that the equity ownership structure is significantly associated with post‐IPO stock returns.
Journal
Accounting & Finance – Wiley
Published: Sep 1, 2010