This study examines the impact of Shenzhen Stock Exchange’s (SZSE) information disclosure ratings on investment efficiency in China. Based on a sample of Chinese A-share listed companies on the SZSE from 2001 to 2018, we discover that superior information disclosure ratings improve investment efficiency after controlling for various firm- and industry-level variables. Our findings remain valid after various robustness tests and using instrumental variables to address the endogeneity problem. Specifically, we find that improving information disclosure ratings help firms attract more investor attention, which leads to higher investment efficiency. In addition, this information disclosure effect is more pronounced for underinvestment firms and firms on the main board than for smaller firms on SEM (small- and medium-sized enterprise) and GEM (growth enterprise market) boards. Our evidence supports the idea that regulatory activities for information disclosure ratings of companies listed on China’s stock exchanges improve investment efficiency.

The paper estimates the primary market pricing efficiency of China’s IPO after the IPO reform in June 2009, based on the stochastic frontier analysis. The results show that IPO pricing is not fully effective, and discover the existence of “deliberate underpricing”. The average pricing efficiency of China's IPO has reached 0.85, which is close to the level of the mature capital market; To certain extent, we can say that the reform of China's IPO has achieved the initial success. We also found that earnings per share and price earnings ratio are the greatest influencing factors. And there is no underwriter reputation in China. For different markets, we disclosed that, IPO pricing efficiency values in Growth Enterprise Market and Small and Medium Enterprise Board are substantially higher than the Main Board market. The paper analyzes the causes, and then gives some suggestions for the reform of China's IPO.

With a sample of 504 IPO issuers over a period of 2002-2008 in China, this paper studies a previously ignored issue by examining the relationship between pre-IPO earnings management and underwriter reputation for issuers with different level of marketization. We document that underwriter reputation is negatively related to pre-IPO earnings management only if the issuer is highly marketized. Specifically, we find a significantly negative relationship between pre-IPO earnings management and underwriter reputation if the issuer is a non-state-owned enterprise (NSOE) issuer, a small-size issuer, or is listed on the Small and Medium Enterprise (SME) Board. No significant association is found for the state-owned enterprise (SOE) issuers, the large issuers, or Main Board issuers. We argue that the results are driven by the fact that issuers in the NSOE, small-sized, or SME market segment have more incentives to signal their earnings quality to avoid adverse selection by the investors, and/or reputable underwriters are more influential over their clients in mitigating earnings management.