Why do some Chinese technology firms avoid ChiNext and go public in the US?

Ufuk Gucbilmez

Research output: Contribution to journalArticlepeer-review

Abstract

Some Chinese technology firms prefer to go public on US exchanges despite the launch of ChiNext as a NASDAQ-style board of the Shenzhen Stock Exchange in late 2009. Conventional hypotheses based on sales internationalization and issuing costs fail to explain this preference. Instead, our findings suggest the existence of a separating equilibrium in which small but profitable firms choose ChiNext and large firms backed by foreign venture capital prefer US exchanges as their IPO location. Our findings have broader implications for entrepreneurial finance in China. Policy suggestions are offered for increasing the number of foreign VC-backed IPOs on ChiNext.
Original languageEnglish
Pages (from-to)179–194
JournalInternational Review of Financial Analysis
Volume36
Early online date28 Feb 2014
DOIs
Publication statusPublished - Dec 2014

Keywords

  • IPO
  • venture capital
  • China

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