Research On IPO Underpricing In Chinese A-share Market

Compared to the mature stock markets in the West, the level of IPO underpricing in Chinese stock markets is unusually high. This phenomenon not only leads to large unrestricted capital flows and speculations, but also hinders the function of resources optimization in capital markets. Many scholars have studied this phenomenon extensively, but still can not fully explain Chinese market's high level underpricing and improve the efficiency of capital markets. In practice, the regulatory bodies have introduced a number of regulatory policies in recent years aimed at controlling the level of underpricing, but there are some disputes on the direction of the reform. Therefore, this paper intends to do some useful exploration on the above issue, namely, researching the causes and influence factors of the high level IPO underpricing in Chinese A-share market.This paper is divided into five chapters, the first chapter is the introduction part, which describes the research background and structure of the paper to help the reader gain a general understanding of the whole content, in addition, it also introduces the innovation and shortage of the paper. The second chapter is the literature review, firstly, it introduces the three IPO market anomalies, so that the readers could gain a more comprehensive understanding of the IPO underpricing phenomenon, then it reviews the literature relevant to the topic systemically in order to lay a foundation for the modeling. The third chapter studied the evolving of the IPO system in our country, as the IPO system includes the registered system and pricing system, I discuss the offering system from these two aspects. In addition, in order to help the conduction of empirical research in the next chapter, this chapter also analyzes the overall IPO underpricing characters in Chinese market. In Chapter four, I further my study from the empirical perspective. After the introduction of the data sources, I analyze the two aspects of offering system by using one-way ANOVA. After this, according to the formula of the IPO underpricing, I choose multiple variables from the perspective of the primary and secondary market to conduct stepwise regression analysis. The study finds that, compared to the reasons relating to the primary market, the secondary market factors has a more significant impact. The final chapter gives the conclusions of this study, and put forward some policy recommendations.