标题：Pre-IPO private equity investors and their impact on the IPO process under China’s compliance system

汇报人：Laura Xiaolei Liu（Cheung Kong Graduate School of Business and Hong Kong University of Science and Technology）

功夫：2012年5月4日（周五）10:00-11:30am

地址：J9集团国际站新楼217教室

提要：How do private equity (PE) investors affect a firm’s decision-making during the IPO process?The special IPO approval system for China’s stock market provides a unique setting to investigate this issue. In China, all IPO candidates need to submit an application to the China Securities Regulatory Commission and only approved firms can then be listed. Using data from ChiNext, we documented that pre-IPO PE investors, who invested in a firm less than a year prior to the IPO filing day, are associated with higher earnings management at the IPO, while longterm PE investors are associated with lower earnings management at the IPO. We propose that this is because long-term PE investors may prefer conservative financial statements to increase the probability of gaining approval in order to guarantee successful exit; on the other hand, pre-IPO PE investors are more likely to have political connections that can help the firms gain approval and they share the profits through a high IPO price. Consistent with this explanation, we find that local pre-IPO PE investors, who are more likely to have strong political connections, are associated with a higher probability of IPO approval. The evidence suggests that PE investors do have an impact on a firm’s decision-making during the IPO process. It also points to an important cost of the IPO approval system in China as well as the rent-seeking behavior associated with it.

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