Issuance overpricing of China's corporate debt securities

• 成果类型: Article
• 署名作者: Ding, Yi; Xiong, Wei; Zhang, Jinfan
• 署名单位: The Chinese University of Hong Kong, Shenzhen; The Chinese University of Hong Kong, Shenzhen
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.06.010
• 发表日期: 2022
• 页码: 328-346
• 关键词: Overpricing; New issues; Corporate debt securities; Chinese market

摘要

We document issuance overpricing of corporate debt securities in China, which is robust across subsamples with different credit ratings, maturities, and issuers. This phenomenon contrasts with underpricing of equity and debt securities in Western countries and reflects China's distinct institutional environment. The average overpricing dropped from 7.44 basis points to 2.41 basis points after the government prohibited underwriters from using rebates in issuances in October 2017. By analyzing overpricing before and after the rebate ban and across different issuers and underwriters, we uncover two channels for underwriters, who compete for future underwriting business, to drive up overpricing: rebates and self-purchases. (c) 2021 Elsevier B.V. All rights reserved.