Template-Type: ReDIF-Paper 1.0
Title: IPO Reform and Venture Capital: Evidence from China
Author-Name: Celine (Yue) Fei
Author-Email: yue.fei@uni-mannheim.de
Author-Name: Ulrich Hege
Author-Email: ulrich.hege@tse-fr.eu
Author-Name: Xiao Jia
Author-Email: jiaxiao@hust.edu.cn

  
Classification-JEL: G24, G28
Keywords: IPO Reforms; IPO Listing Requirements; Venture Capital; Business Description; BERT; China


Abstract:
We study how IPO reforms transmit to venture capital (VC) markets using the introduction of
China’s entrepreneurial boards, ChiNext and the registration-based STAR. We document that
both boards attract younger, higher-growth firms with weaker fundamentals in levels, but post
IPO growth persists for ChiNext firms while decelerating sharply for STAR firms. VC backing
plays different roles across regimes: on ChiNext it aligns with valuation premia and long-run
outperformance, whereas on STAR it mainly predicts higher first-day returns. To identify causal
effects on VC allocation, we construct novel text-based regulatory exposure measures from listing
documents using keyword matching and Sentence-BERT semantic similarity, and show that VC
financing reallocates toward firms more aligned with “supported” activities.

Note: 
Length: 55
Creation-Date: 2026-03
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp736
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2025_736