IPO Underpricing to Retain Family Control under Concentrated Ownership: Evidence from Hong Kong
研究香港上市公司中家族企业是否通过IPO抑价来避免外部大股东进入，发现家族参与度越高，抑价越大，且家族信托与抑价是保留控制权的替代方式。
Abstract: This study examines whether family firms utilize IPO underpricing in order to retain family control as a means of avoiding outside blockholders. Using a sample of firms listed in Hong Kong where corporate ownership is concentrated, we find that larger IPO underpricing is associated with stronger family involvement, and with greater potential for diffusing ownership among family members. We further find evidence that firms with strong family involvement attract more subscription for their shares, have less concentrated outside blockholdings, and reduce ownership more slowly than do firms with weak family involvement, suggesting that family owners use underpricing to reduce outside blockholdings. We also find that firms controlled by family trusts have less IPO underpricing, suggesting that IPO underpricing and the family trust are effective substitute methods for retaining family control.