Competitive Effects of IPOS: Evidence from Chinese Listing Suspensions


Frank Packer

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2020-30 | September 23, 2020

Theory suggests that initial public offerings (IPOs) can adversely impact listed firms, both directly by increasing intra-industry competition, and indirectly by completing related asset market spaces. However, the endogeneity of individual IPO activity hinders testing these channels. This paper examines listing suspensions in China in a panel specification that accounts for macroeconomic and financial conditions, isolating the firm-level IPO impact. We measure the competitive impact of listing suspensions through the value share of postponed firms in the IPO queue in their industry, and asset-space competition by firms’ historical covariance with a synthetic portfolio of listed firms with the IPO queue industry mix at the time of suspension. Our results support the predicted IPO effects through both channels. We also document heterogeneity in IPO effects. Stronger firms measured through a variety of proxies–benefit less from the suspension news. These results are robust to a battery of sensitivity tests.

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Article Citation

Packer, Frank, and Mark M. Spiegel. 2020. “Competitive Effects of IPOS: Evidence from Chinese Listing Suspensions,” Federal Reserve Bank of San Francisco Working Paper 2020-30. Available at

About the Author
Mark Spiegel
Mark Spiegel is a senior policy advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco. Learn more about Mark Spiegel