Working paper

IPO Reform and Venture Capital: Evidence from China”

Yue Fei, Ulrich Hege, and Xiao Jia

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 postIPO 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.

Keywords

IPO Reforms; IPO Listing Requirements; Venture Capital; Business Description; BERT; China;

JEL codes

  • G24: Investment Banking • Venture Capital • Brokerage • Ratings and Ratings Agencies
  • G28: Government Policy and Regulation

Reference

Yue Fei, Ulrich Hege, and Xiao Jia, “IPO Reform and Venture Capital: Evidence from China””, TSE Working Paper, n. 26-1732, April 2026.

See also

Published in

TSE Working Paper, n. 26-1732, April 2026