Do Macroeconomic Factors Affect IPO's in China?

This paper investigates the effect of macroeconomic variables on the numbers of IPOs in China. There are limited studies on this topic. Changes in macroeconomic variables such as interest rates, GDP (Gross Domestic Product), inflation rate and the unemployment contain useful information for stock market participants (Chen et al., 1986). 5 hypotheses are proposed for empirical testing using Cointegration and Vector Error Correction models. Data will cover the period from 2007 to 2012. We expect to find evidence of a significant negative relationship between interest rate and the numbers of IPOs, and a significant positive relationship between industrial production and the numbers of IPOs to be confirmed.