The Pricing Reform of Registered New Shares and IPO Quality: Based on the Perspective of Technological Innovation

Abstract

Abstract: A specific real options model is proposed through adding IPO pricing cap and innovation, and the optimal IPO timing and the market value of innovative enterprises are justified under regulatory and non-regulatory regime. Our results show that the IPO pricing reform of the registration system can 1) improve the IPO valuation of high-quality innovative enterprises, 2) enhance the listing enthusiasm of high-quality innovative enterprises, and 3) encourage high-quality innovative enterprises to be listed earlier by reducing the option cost and listing threshold. The conclusions can help the understanding for promoting the registration reform and improving the quality of listed enterprises in China from a theoretical perspective.

Key words: registration system, IPO timing, real options, innovation

Zhu Wenda, Hu Jie, Dong Yinhong. The Pricing Reform of Registered New Shares and IPO Quality: Based on the Perspective of Technological Innovation[J]. Management Review, 2023, 35(2): 70-78.

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