The Impact of Listing Review Inquiry on Pre-IPO R&D Manipulation: Empirical Evidence from the Science and Technology Innovation Board

With a core focus on sci-tech attributes, the science and technology innovation board (STAR Market) has transformed traditional earnings management under the approval-based system into R&D manipulation targeting innovation capabilities under the registration-based reform. Using a sample of firms listed on the STAR Market between 2019 and 2023, this study examines the governance effect and underlying mechanisms of inquiry-based regulation under the registration-based system on pre-IPO R&D manipulation from the perspective of IPO review inquiry. The findings reveal that high-intensity IPO review inquiry significantly suppresses pre-IPO R&D manipulation, and these conclusions remain robust after addressing endogeneity concerns and conducting rigorous robustness tests. Mechanism analysis indicates that IPO review inquiry primarily mitigates R&D manipulation by enhancing the readability of IPO response letters and strengthening oversight through institutional investor visits. Heterogeneity tests reveal that the suppressive effect is more pronounced in firms with lower corporate governance quality, as well as those audited by high-reputation accounting firms or sponsored by reputable underwriters. Further economic consequence analyses indicate that high-intensity IPO review inquiry effectively reduces IPO overfunding and optimizes capital allocation, whereas pre-IPO R&D manipulation significantly weakens the governance effectiveness of inquiry and exacerbates capital misallocation risks. This study not only uncovers a new trend in IPO opportunism—shifting from earnings manipulation to R&D manipulation under the registration-based system—but also validates the effectiveness of the inquiry system through the chain of regulatory inquiry–disclosure–market monitoring. It provides empirical support for implementing targeted and differentiated review mechanisms on the STAR Market and for reinforcing the gatekeeping responsibilities of intermediary institutions.