{"title":"Accelerated depreciation tax policy for fixed assets and IPO underpricing: Evidence from China","authors":"Jing Zeng , Gaoling Luo , Jun Wu","doi":"10.1016/j.frl.2025.107147","DOIUrl":null,"url":null,"abstract":"<div><div>We use a difference-in-differences research design to study the impact of accelerated depreciation tax policy (ADTP) for fixed assets on IPO underpricing using a sample of China's A-share IPO firms from 2010 to 2019. The findings suggest that ADTP significantly reduces IPO underpricing. The channel tests show that ADTP reduces IPO underpricing by alleviating financial constraints and reducing a firm's risk level. The moderating analysis shows that the effect of ADTP on lowering IPO underpricing is more salient for firms with lower capital intensity, higher R&D investment, or non-state-owned. Overall, ADTP is helpful in capital formation.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"78 ","pages":"Article 107147"},"PeriodicalIF":6.9000,"publicationDate":"2025-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Finance Research Letters","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1544612325004106","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"2025/3/6 0:00:00","PubModel":"Epub","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
We use a difference-in-differences research design to study the impact of accelerated depreciation tax policy (ADTP) for fixed assets on IPO underpricing using a sample of China's A-share IPO firms from 2010 to 2019. The findings suggest that ADTP significantly reduces IPO underpricing. The channel tests show that ADTP reduces IPO underpricing by alleviating financial constraints and reducing a firm's risk level. The moderating analysis shows that the effect of ADTP on lowering IPO underpricing is more salient for firms with lower capital intensity, higher R&D investment, or non-state-owned. Overall, ADTP is helpful in capital formation.
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