What drives differences in underpricing between the US and China?

Abstract: This paper presents an analysis and comparison of the US and Chinese IPO market. Thiscomparison is interesting since the US has traditionally been the largest IPO market in theworld but China is catching up rapidly and attracting many large IPOs. The major finding ofthe paper is that IPOs in China are severely more underpriced than the ones in the US,because of a difference in information asymmetry and a difference in regulatory environment.