This thesis examines the fees charged by underwriters for conducting IPOs in China. By examining a sample of 1,171 Chinese IPOs conducted during 2001-2011, I obtain the first evidence from China on the direct issue cost, the gross spreads, and identify its determinants, including issue proceeds, number of lead managers, and lead manager reputation. The results show a pattern of over-time increase of the spreads, which is at 0.16 percentage points per year for state-owned enterprise (SOE) offerings and 0.73 percentage points per year for non-SOE ones. The gross spreads do not exhibit clustering, but are largely consistent with increased demand for underwriting services from non-SOEs that, together with increased complexity of underwriting, has pushed underwriting fees up. / published_or_final_version / Economics and Finance / Master / Master of Philosophy

published_or_final_version / Business / Doctoral / Doctor of Philosophy

published_or_final_version / Journalism and Media Studies Centre / Master / Master of Journalism

published_or_final_version / abstract / toc / Economics and Finance / Doctoral / Doctor of Philosophy

published_or_final_version / Business Administration / Master / Master of Business Administration

published_or_final_version / Economics and Finance / Master / Master of Economics

In recent years, the number of Chinese companies going public has grown significantly. Some of these companies have listed their shares locally in Shanghai and Shenzhen, while others have chosen a stock exchange with better access to international capital (e.g., Hong Kong). This thesis examines 1) the determinants of the firms’ choice regarding initial public offering (IPO) locations and 2) whether IPO locations might affect their subsequent performance. Our study focuses solely on firms in the real estate sector in which pre-IPO attributes as well as the underlying asset value can be identified and measured. Our dataset includes 29 Chinese real estate firms that have issued shares in Shanghai or Shenzhen and 28 Chinese firms with IPOs in Hong Kong during the period of 1992-2008. To explain their IPO location choice, the self-selection or signaling theory suggests that firms with higher quality would signal this information by issuing shares in Hong Kong. Given the more stringent listing requirements and better informational disclosure schemes in the Hong Kong market, if a firm has low quality, such information is more likely and quickly to be discovered in Hong Kong than in Mainland China. Therefore, it is costly for such firms to imitate good firms’ IPO location choice. Once the firms have been listed, the corporate governance literature suggests that firms listed in Hong Kong would demonstrate a greater performance increase than those listed in Mainland China, because Hong Kong has a mature system of information disclosure, analyst coverage, and law enforcement. We found that firms listed in Hong Kong achieved higher Return on Asset (ROA) than those listed in Mainland China. We then construct four proxies for firms’ unobserved quality based on ex post abnormal stock or profit returns after IPOs. We obtained support for the signaling and self-selection effects: firms having higher quality, non-state ownership, and larger leverage ratio were more likely to conduct IPOs in Hong Kong instead of in Mainland China. Also consistent with the signaling theory, we found that firms listed in Mainland China were more likely to use IPO underpricing as a signal for firm quality than firms listed in Hong Kong were. / published_or_final_version / Real Estate and Construction / Doctoral / Doctor of Philosophy

published_or_final_version / Business Administration / Master / Master of Business Administration

published_or_final_version / Business Administration / Master / Master of Business Administration

By doing so, we contribute to the existing literature in at least the following aspects: / First, contrasted with Chakravarty (2001) which finds that cumulative price change is mainly caused by institutional investors, we document that, at least in the Chinese IPO market, it is the individual investors, rather than the institutions, that have the most dominant impact on the cumulative price change. This is consistent with the prediction of De Long et al. (1990a) and the fact that noise trader risks play an important role in Chinese stock market, which leaves the prices deviated from fundamental values and not arbitraged out. / Initial Public Offering (IPO) refers to the first sale of stocks by a company (called an issuer) to the public. Since the late 1960s high initial return, which is measured from the offer price to the first-day closing price, has become a hot topic. This phenomenon has been found in a range of countries, and in China the ratio is even much higher. / On top of that, we further investigate different types of individual investors by categorizing them according to their trading experiences. We find that those less experienced individuals tend to buy an IPO stock in a more impatient way, while investors who buy on the first non-hit day are more experienced. And waiting averagely 1.4 days can raise the return by more than 1.5% in 30 days. / Our research attempts to tackle the high initial return in China from the aspect of investor structure. First, we find empirical evidence that there are more sells than buys on the IPO day, and this demonstrates that flippers are responsible for the huge trading volume. Combining the identities of investors with the trading data, we also find that individual investors dominate the first day trading, in the sense that individuals, rather than institutions, contribute a larger part of the cumulative price change on the IPO day. / Our studies have many practical implications from several perspectives. First, analyzing the investor structure and their behavior during the IPO day can help us understand the characteristics of those investors who move the stock price. Second, our research can also help to know the different trading style of different kinds of investors. According to our research, investors maybe can design more favorable investment strategies. And for the regulators, our research can help them formulate more reasonable trading rules and regulations. / Second, existing literature show that more experienced investors tend to end up with better investment results, while our study builds a bridge between investor experiences and their decision making procedure. Our finding also contributes to the technical analysis literature, such as Lo, Mamaysky and Wang (2000), among others, in that we find experienced investors indeed tend to do more technical analysis and obtain better investment results. / Zhai, Weili. / Advisers: Jia He; Ying Foon Chow. / Source: Dissertation Abstracts International, Volume: 73-08(E), Section: A. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2011. / Includes bibliographical references (leaves 113-122). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. Ann Arbor, MI : ProQuest dissertations and theses, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstract also in Chinese.