A Study On IPO Underpricing And Its Influence Factors In China's Growth Enterprise Market

In the progress of China's reform and opening up, SMEs have played an indispensable role in China's economy. In order to solve the financing issues of SMEs, the GEM finally emerged after a decade's preparation. However, providing that our economic society is in transition period, our capital market system compared with the west is still far from the perfect, heavy IPO under-pricing phenomenon maintains. With regard to China's new-born GEM, these issues have been more obvious. Therefore, from the perspective of both theory and practice, research on the GEM IPO under-pricing phenomenon will be significant for improving China's GEM system, promoting the efficiency of SMEs'financing and modifying the operating environment of China's capital market.This research mainly includes the following aspects: First, analyze China's GEM features,positions and the characteristics of GEM companies. Then combining qualitative analysis of IPO on GEM and mainboard and quantitative analysis which contain descriptive statistics analysis, ANOVA analysis and multipled regression analysis, it explores on the factors of IPO under-pricing on the China's GEM. The results can be summed up with three points:①IPO underpricing on GEM is heavier than mainboard.②It is the investors'irrational behaviors pushing the stock price yields high on the first day instead of discount issuing that led to IPO underpricing on GEM. The investors'irrational behaviors includes that the company on the GEM are small and easy to speculate; and the small and medium investors are hardly to measure the valuation of GEM companies and the irrational behaviors are more heavier than the mainboard.③The venture capitalists in China with prudent investment strategies, invest too small to play their roles of monitoring and third-party certification. These questions need to be further resolved.