Description:
This paper compares Chinese firms’ IPO performance both in the short- and the long-run on domestic and overseas markets and investigates what factors determine the IPO destinations of Chinese firms. We find the contribution of alpha to short-run returns is larger in China’s domestic market, while longer-term returns are mainly driven by fundamentals in all the markets. Binary choice model shows market size and trading profitability appear to be the most important factor affecting Chinese firms’ IPO destination choice. Financial openness increases the likelihood of overseas IPOs and the likelihood of listing in the US after 2014