We derive the optimal underwriting method and the quantitative IPO pricing rule that this method implies in a market with informational frictions consisting of fully rational banks, issuers, and investors. In an efficient IPO market, an issuer's expected initial return will be determined...

We study the impacts of regime changes and related rule implementations on IPOs’ initial return for China’s entrepreneurial boards. We find that the most efficient regulation regime in China’s IPO pricing has four characteristics: 1) registration system, 2) no hard return caps and no...