AN ANALYSIS OF THE IMPACT OF IPO ON CHINESE AUTOMOTIVE DEALER GROUPS’ PERFORMANCE

Abstract

There are some substantial disparities among organizations in performance after going public in the Chinese automotive dealer industry. This dissertation analyzes the prospectus, organizational annual report, and other public data available for the public firms in the automotive dealer industry. The dissertation conducts a longitudinal analysis of firms with continuous development and firms with operating problems. Multiple regression models are used to test various hypotheses. The results indicate that firms that are backed by venture capital experience perform worse after the IPO. Ownership Structure is positively correlated with the change in firm performance around the IPO. The change in Venture Capital ownership around the IPO is negatively correlated with the change in firm performance. Moreover, the increase in Venture Capitalist age around the IPO is negatively correlated with firm performance. Since IPOs are associated with performance decline, recommendations are provided to mitigate their impact.