Information content of IPO prospectus on listing pricing: Evidence from China

This paper studies the impact of the degree of prospectus disclosure on the listing price. Our analysis is based on a dataset of all companies listed on Chinese A-shares from January 2016 to June 2021. We provide a measurement for the information content of the IPO prospectus by the heterogeneous text of the prospectus. We find that the information content of the IPO prospectus by heterogeneous text has a negative effect on the listing price. Furthermore, we find that the effect of prospectus disclosure of listing pricing is more pronounced when the firm has a higher proportion of intangible assets. These results provide evidence of the connection between the information content of the IPO prospectus and IPO pricing.