Does the reform of the IPO pricing affect M&A?

This study investigates the effect of the reform of IPO pricing on M&A using a sample of Chinese listed companies during the period 2006-2019. We find that companies listed in the IPO pricing marketization stage raise more funds and their financing constraints are eased, which increases the possibility and frequency of M&A after listing, and the scale of M&A also increases signifi-cantly. The market performance of M&A is better for companies listed in the pricing marketi-zation stage. The above conclusions still hold after a series of robustness tests. Further, we identify that the relationship is more pronounced in high external financing dependent enterprises and non-state-owned companies. Overall, this paper can provide implications for better driving the reform of the IPO pricing.