Journal of Competitiveness | 2026
Authors: Zuo X.; Shen S.
DOI: 10.7441/joc.2026.01.06
Journal: Journal of Competitiveness
Year: 2026
Publisher: Tomas Bata University in Zlín
Document Type: Article
Open Access: All Open Access; Gold Open Access
Cited by: 0
The registration-based IPO system on China's Science and Technology Innovation Board (STAR Market) places strong emphasis on firms' R&D capabilities, which may induce some issuers to engage in R&D "window dressing" to improve their apparent competitiveness. This study investigates how R&D window dressing affects the long-term value and post-IPO performance of STAR Market-listed firms from 2019 to 2021, and whether underwriter reputation moderates these effects. Based on information asymmetry, agency theory, and signaling theory, we empirically examine the economic consequences of opportunistic R&D disclosure practices in a high-tech IPO setting. The results show that R&D window dressing significantly undermines firms' long-term value and operating performance, although reputable underwriters can partly mitigate these adverse effects. Firms with severe R&D window dressing exhibit lower shareholder returns and weaker financial performance during the first two years after listing. Using the COVID-19 pandemic as an exogenous shock, we further show that firms with less R&D window dressing display stronger resilience to external market fluctuations, highlighting the importance of substantive rather than symbolic innovation. The findings underscore the need for more transparent R&D disclosure and stronger intermediary oversight under the registration-based framework, and provide meaningful implications for regulators, investors, and underwriters in emerging tech capital markets. © 2026, Tomas Bata University in Zlín. All rights reserved.
IPO pricing efficiency; long-term firm value; R&D information window dressing; STAR Market; underwriter reputation