An empirical study on the initial public offering effect of Chinese small and medium-sized enterprise board

This paper studies the initial public offering (IPO) effect of the listed companies on Chinese small and medium-sized enterprise (SME) board. We select the 54 companies listed in 2009 as the sample and analyze the financial indicators of the sample companies from 2007 to 2011. The empirical results show that the IPO effect exists on Chinese SME board. Further, this paper analyzes four factors that may affect the company performance before and after the IPO. It is found that the companies in the central and western regions have a better performance than those in the eastern region after the IPO, the amount of funds raised and the shareholding percentage of the largest shareholder have positive impacts on the company operating results before and after the IPO, the performances of the state-owned holding companies are better than the private companies. The paper also establishes a regression model to explain the generation of the IPO effect from the company level, the regression results indicate that the generation of the IPO effect is not entirely due to the company-level factors.