| Author: | Yin, Li |
| Title: | Does innovation drive IPO? Evidence from SMEs on new OTC market becoming listed companies |
| Advisors: | Jin, Jimmy (AF) Wei, Steven (AF) |
| Degree: | DFinTech |
| Year: | 2024 |
| Subject: | Small business -- China -- Management Technological innovations -- Management Strategic planning Going public (Securities) -- China Hong Kong Polytechnic University -- Dissertations |
| Department: | Faculty of Business |
| Pages: | 180 pages : color illustrations |
| Language: | English |
| Abstract: | This study focus on a special juncture for small and medium-sized enterprises (SMEs), which is leaving from New OTC Market to Stock Exchange in China. we examines the impact of innovation and marketization on the IPO process for SMEs on New OTC Market. Using data from year of 2018 to 2023, we investigate the relationship between research and development ratio (RD_rate)and the likelihood of SMEs going public, as well as the amount of IPO proceeds and IPO waiting time. We also explore the moderating effects of the marketization score, the government-market relationship score, and the region. Our findings show that RD_rate has a significant positive effect on the likelihood of SMEs going public, and positively affects the amount of IPO proceeds. However, it has a significant negative effect on the IPO waiting time, indicating that firms with higher RD_rate tend to have longer waiting times before going public. The robustness check shows the same effects as well for R&D investment (RD). The marketization score and the government-market relationship score strengthens the effect of RD_rate on IPO proceeds and waiting time. Additionally, the Eastern Region of China benefits from increased RD_rate in terms of higher IPO proceeds, but faces longer waiting times for IPOs because of stricter due diligence process. Our study provides valuable insights for policymakers, investors, and business owners seeking to support the growth and success of innovative SMEs in China. Specifically, the findings suggest that increasing RD rate and investment can improve the likelihood of SMEs going public and raise the amount of IPO proceeds. However, firms need to be aware that higher RD rate and investment may result in longer waiting times before going public. Policymakers and investors should consider these factors when designing policies and programs aimed at promoting innovation and entrepreneurship and supporting the growth and development of SMEs in China. Our study highlights the importance of the marketization score and the government-market relationship score in moderating the impact of RD_rate on IPO outcomes. Firms with higher marketization scores and government-market relationship scores are more likely to benefit from RD_rate in terms of higher IPO proceeds but may suffer longer IPO waiting time. Policymakers and investors should take these factors into account when designing policies and programs aimed at fostering innovation and supporting the growth and development of SMEs in China. In addition to the practical implications, our study also makes several contributions to the academic literature. First, we provide empirical evidence on the relationship between R&D and IPO outcomes in the context of SMEs listed on the New OTC Market in China. Second, we explore the moderating effects of the marketization score, the government-market relationship score, and the region, which have not been examined in previous studies. Finally, our study identifies several control variables that are significant in explaining IPO outcomes in China. |
| Rights: | All rights reserved |
| Access: | restricted access |
Files in This Item:
| File | Description | Size | Format | |
|---|---|---|---|---|
| 7815.pdf | For All Users (off-campus access for PolyU Staff & Students only) | 2.52 MB | Adobe PDF | View/Open |
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