Categorical listing criteria, co-investment system and growth manipulation: empirical evidence based on the implementation of the registration system of STAR market

ABSTRACT China’s STAR Market, with its registration-based IPO system, blends market-oriented features with growth criteria, making it an ideal research setting to analyze IPO companies’ growth manipulation and its economic impacts. Using data from 2019 to 2021, our study employs non-parametric methods to reveal significant growth manipulation among STAR Market companies during IPOs. We observe that manipulation intensifies across categorical listing criteria I to V, particularly among higher-valued companies. However, the coinvestment system helps curb manipulation in Pre-IPOs. Notably, lower profitability and industry status amplify the effects of listing criteria and valuation on manipulation. Economic tests confirm that Pre-IPO manipulation hastens listings but results in higher IPO underpricing. Our findings shed light on the repercussions of the registration-based IPO system, vital for refining the STAR Market and extending similar reforms to other segments.

• Publication year

  2024

• Venue

  China Journal of Accounting Studies

• Publication date

  2024-01-02

• Fields of study

  Not labeled

• Identifiers
  DOI 10.1080/21697213.2024.2336088
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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