Overseas listing and performance of private enterprises -Evidence from private enterprises listed in Hong Kong

Abstract

This study takes Chinese private enterprises listed in Hong Kong as a sample, examines change of Chinese private enterprises' performance before and after overseas listing. Theoretically, there are two opposite forces imping on the performance of the overseas listing Enterprises: the positive effect of the overseas listing and the negative effect of IPO. The empirical results indicate that private enterprises listed overseas have significant IPO effect, that is private enterprise's performance rises significantly before overseas listing, but then falls sharply during the listing year. In addition, overseas listing effect is not long-term significant, that is overseas listing can not continue to improve private enterprise performance. Therefore, private enterprises must be prudentially chosen overseas listing.