Abstract:
The media can influence asset prices by shaping investor perceptions and emotions. Under the registration-based IPO system, where the pricing of IPOs can exceed the previous 23-times price-to-earnings ratio cap, companies are motivated to manage media attention in order to achieve higher offering prices. This paper selects companies listed on the STAR Board and the ChiNext Board under the registration-based IPO system, as well as non-registration-based companies during the same period, to examine whether companies engage in media attention management before listing under the registration-based IPO system. That is, whether companies proactively intervene in media coverage to significantly alter the volume or tone of reports for their own benefit. The findings are as follows. (1) Registration-based IPO companies spend more on media public relations, receive greater media attention, obtain more favorable media coverage, and do engage in media attention management. (2) Higher media attention and more positive coverage are associated with greater investor enthusiasm for bidding and subscription, leading to higher bidding and offering prices, thus enabling companies to achieve the intended effects of media attention management. (3) Higher media attention and more positive coverage are associated with greater first-day IPO returns but poorer long-term post-listing performance. This study reveals the media attention management behaviors of companies under the registration-based IPO system and provides references for further strengthening the regulation for media and improving IPO information disclosure system.
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