Abstract
This study investigates the effect of the reform of IPO pricing on M&A using a sample of Chinese listed companies during the period 2006-2019. We find that companies listed in the IPO pricing marketization stage raise more funds and their financing constraints are eased, which increases the possibility and frequency of M&A after listing, and the scale of M&A also increases significantly. The market performance of M&A is better for companies listed in the pricing marketization stage. The above conclusions still hold after a series of robustness tests. Further, we identify that the relationship is more pronounced in high external financing dependent enterprises and non-state-owned companies. Overall, this paper can provide implications for better driving the reform of the IPO pricing.
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