W. Li, Y. Li, and Zhu (2016) create a well laid out research paper with a logical flow. The authors find overall Chinese IPO stock market return results similar to those found in other stock markets. Their major contributions are: documenting that official government exemptions from Chinese government IPO requirements are not rare; that exemptions continue over a long time-series of data; and that exemption firms generate substantially higher post-IPO stock market returns than Chinese IPOs that do not receive exemptions from Chinese government requirements for stock market listings.

The authors use event study methodology to investigate “exemptions” through the effects on post-IPO shareholder wealth, as well as by examining financial accounting statement-derived variables, and other economic characteristics, for exemption IPO firms relative to IPO firms going public without an exemption, both before and after IPO.

The overall contribution to the literature is that the authors present an easily...

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