Test CSRC's Ability to Select Private-Owned Enterprises for IPO

摘要

In China, all applications for IPO and listing on stock exchanges must be approved by China Securities Regulatory Commission (CSRC) for the purpose of ensuring the quality of listed companies. By comparing the law-compliance behavior of private-controlling companies that have gone public through IPO and that of private-controlling companies that were not approved by CSRC for IPO and thus have had to go public through reverse takeover, this paper finds that the former type of companies is more likely to abide by laws and regulations than the latter type of companies. Such a finding suggests that in terms of corporate governance, CSRC has been successful in selecting good private- owned enterprises for IPO.