The Influences on Overseas Listing Ofwuxi’s Private Nterprises and the Empirical Evidence of Stock Performance
|Keywords||Wuxi’s private enterprises IPO underpricing company’s value|
With China’s economic development, private economy has played a crutial role as one of the most important part of the whole country’s economic life. And its contribution to the total economy is increacingly significant. It provides a lot of resources to social progress and development. A single private enterprise’s developing would be impeded by capital bottleneck even if the scale of the private economy is expanding. Domestic financial institutions provide little unobstructed financing chances for private enterprises, especially for small-sized private enterprises and domestic listed is high cost. In this case, more private enterprises choose listing overseas to achieve financing. Taking Wuxi for instance, at the end of the year 2007, there are seventeen enterprises listed overseas. Most of which listed in Singapore,and some of them listed in NASDAQ、Hongkong and Europe. Research on China’s enterprises listing overseas is limited. The existing researches focus on differences in stock prices of dual-listing enterprises and reasons for the differences, also the differences in domestic and foreign financial guidelines and corporate goverance. Choosing Wuxi’s private enterprises as samples, this article argues the elements that have influences on private enterprises going public overseas ,also short and long term performance of private enterprises which achieved their initial public offering in Singapore and in China. The results show that IPO underpricing is a universal phenomenon, which results from the persuing of investors and market, but not the low offer prices in Singapore market. The listing companies’offer prices corresponded with their company-value. Domestic policies provide convenience to listing enterprises and have positive impacts on private enterprises’overseas-listing. The location of overseas-listing depends on the industry the enterprise belonged to and the criteria of foreign exchanges. And in the long-run performance, domestic listing companies are better than those listied in Singapore which is weak to the market in two years aftermarket performance, and both of them are located in Wuxi. Since the researches before are focused on secondary listing and cross-listing, this article enriches the empirical evidence of IPO underpricing, and could be a reference resource for other domestic private enterprises.