The Impact of Financial Crises on IPO Underpricing in the Chinese Stock Market: A Comparative Analysis of the 2008 Financial Crisis and the COVID-19 Pandemic

The capacity of enterprises to access finance is intrinsically linked to their long-term sustainability. The efficient allocation of financial resources across society increases the utilization of social assets. Initial public offerings (IPOs) represent a highly effective mechanism for generating capital to support the growth and development of firms. The paper thus examines the impact of financial crises, specifically the 2008 financial crisis and the Covid-19 pandemic, on IPO pricing in the Chinese stock market. In this paper, pre-crisis and post-crisis IPO data are analyzed to identify trends and changes in underpricing. Statistical methods are used to examine the relationship between market conditions, economic indicators and IPO characteristics. The results show that IPO underpricing decreased significantly after the 2008 financial crisis due to increased market caution and regulatory changes, while the COVID-19 pandemic led to an increase in market uncertainty and volatility, which led to an increase in underpricing. These insights are significant for investors, companies planning initial public offerings, and policymakers aiming to stabilize financial markets during economic downturns.