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The Cost of Capital Market Distortions: Evidence from Chinese Overseas IPOs
2023-10-13
Time: 10:00 am- 11:30 am, Oct. 13th, 2023
Speaker: Guiying Laura Wu
(Nanyang Technological University)
Venue: 359s, Overseas Exchange Center, Peking University
Platform: Zoom
Link: https://zoom.us/j/96990174936?pwd=ejhZazZqRFZLa2duWXlXZ3B2K2ludz09
Meeting ID: 969 9017 4936
Passcode: inse
Abstract:
Both cross-border capital controls and behind-the-border capital market regulations impose a cost on firms. We propose a willingness-to-pay approach to estimate the overall cost from the viewpoint of entrepreneurs, by comparing Chinese firms listed at home and abroad, that takes into account the endogenous nature of the IPO locational choices. The estimated cost is sizable – equivalent to a haircut in firm value by over 50% - and varies systematically with the tight- ness of either the capital controls or domestic regulations. We also find that the overseas listings exhibit a positive selection – they are better on average than their domestically listed counterparts.
Speaker:
Professor Guiying Laura Wu is an Associate Professor in School of Social Sciences at Nanyang Technological University. Her research centres on the effects of various distortions and frictions on firms’ investment and financing behaviour and their implications to economic development and resource allocation. Her research has been published in top economics journals such as Journal of Development Economics, Journal of International Economics, World Economy and so on. Professor Wu serves as an Associate Editor for Economic Modelling and Singapore Economic Review. She obtained her Ph.D. in economics from University of Oxford in 2010.