Issuance overpricing of China's corporate debt securities

Yi Ding, Wei Xiong, Jinfan Zhang

Research output: Contribution to journalArticlepeer-review

18 Scopus citations


We document issuance overpricing of corporate debt securities in China, which is robust across subsamples with different credit ratings, maturities, and issuers. This phenomenon contrasts with underpricing of equity and debt securities in Western countries and reflects China's distinct institutional environment. The average overpricing dropped from 7.44 basis points to 2.41 basis points after the government prohibited underwriters from using rebates in issuances in October 2017. By analyzing overpricing before and after the rebate ban and across different issuers and underwriters, we uncover two channels for underwriters, who compete for future underwriting business, to drive up overpricing: rebates and self-purchases.

Original languageEnglish (US)
Pages (from-to)328-346
Number of pages19
JournalJournal of Financial Economics
Issue number1
StatePublished - Apr 2022

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management


  • Chinese market
  • Corporate debt securities
  • New issues
  • Overpricing


Dive into the research topics of 'Issuance overpricing of China's corporate debt securities'. Together they form a unique fingerprint.

Cite this