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171st Biweekly Academic Forum

作者:     日期:2016-05-27    来源:

1. Topic: Private Benefits in IPOs: Evidence from State-Owned Firms

2. Lecturer: Chen Zhaohui, associate professor of University of Virginia Mclntire business school. He got his bachelor degree in Fudan University and his PhD in University of Pennsylvania. His research fields include corporate finance, industrial organization, and investment bank and so on. Recently his research focuses on financing contract and reputation. His research findings were published in international academic journals like Journal of Financial and Quantitative Analysis、Journal of Corpaorate Finance、Journal of Financial Economics, etc. and he has attended a huge amount of international academic conferences.

3. Time: May 31st (Tuesday) 2016, 12:30-13:30

4. Place: Room 913, Main Building

5. Host: Huang Zhigang, Associate Professor of School of Finance, CUFE.

Abstract: The IPO literature suggests that top executives may intentionally underprice their firms’ IPOs to pursue private benefits. But little systematic evidence exists that executives receive private benefits personally. Using a unique dataset of the Chinese state-owned firms that went public during 1990-2006, we find evidence supporting that CEOs of state-owned firms attempt to get promotions by underpricing IPOs and allocating IPO shares to parties important to their careers. Specifically, we find that i) executives’ chance of promotion is positively correlated with the level of IPO underpricing, and ii) those executives who can benefit more from underpricing, such as younger executives, actually underprice more. We do not find similar effects in private firms. We also document a significant cost, in the form of punishments, associated with this agency behavior.