We examine two inconclusive issues in the IPO (initial public offering) underpricing literature. It is unclear whether private firms or state-owned enterprises (SOEs) underprice their IPOs more and how the institutional environment affects IPO underpricing. Using a much larger China IPO sample of SOEs, we conclude that SOEs underprice their IPOs more than private firms. Specifically, SOEs controlled by the central government (CSOEs) underprice their IPOs 27 percentage points more than private firms, whereas SOEs controlled by local governments (LSOEs) underprice theirs 7 percentage points more than those of private firms. Using the National Economic Research Institute Index of Marketization (NERIIM) to measure the institutional environment, we find that one index score improvement in institutional environment is associated with a two percentage-point reduction in IPO underpricing. Importantly, a better institutional environment reduces IPO underpricing most effectively for private firms, followed by LSOEs, and the least for CSOEs.

Employing the staggered opening of the High-speed railway (HSR) as an exogenous shock, this paper examines the impact of functional distance on bank loan pricing. Based on a unique loan-level dataset from a nationwide state-owned Chinese commercial bank, we find that after the HSR opening, the loan pricing of local private firms decreases significantly. The possible channel is the facilitating of bank's easier access to soft information through the shortening of temporal functional distance. Moreover, the effect of HSR opening is more pronounced when the borrowing firm is difficult to visit or when loan pricing is more sensitive to information. We also find that the HSR opening increases the loan volume for local private firms, while there are no significant changes in loan pricing or loan volume for public firms with HSR opening. Our main conclusion remains valid after considering various robustness and endogeneity issues.

We consider a general social choice environment that has multiple agents, a finite set of alternatives, independent types, and atomless type distribution. We show that for any Bayesian incentive compatible mechanism, there exists an equivalent deterministic mechanism that (1) is Bayesian incentive compatible; (2) delivers the same interim expected allocation probabilities and the same interim expected utilities for all agents; and (3) delivers the same ex ante expected social surplus. This result holds in settings with a rich class of utility functions, multidimensional types, interdependent valuations, and in settings without monetary transfers. To prove our result, we develop a novel methodology of mutual purification, and establish its link with the mechanism design literature.