Research On Security Underwriter' Reputation Based On Chinese Security Market

This dissertation researched the role of security underwriter in issuance market of security, explained reputation's importance to security underwriter's function of"information producer"and"certifying agency", and studies the significance of reputation mechanism for regulating underwriter's behavior and promoting security issuing market's efficiency. On the basis of the analysis aforementioned, this dissertation also empirically tests relationship between underwriter's reputation of China and factors affecting reputation, and tries to use Principal Component Analysis to build a reputation evaluation model that fits our present requirement. The thesis argues that significance of underwriter not only lies in allocating and selling securities, but also lies in underwriter's role of"information producer"and"certifying agency", which greatly alleviate negative influence of asymmetric information, therefore underwriter promote the efficiency of issuance market of security. However, security underwriters face creditability problem as"information producer". Thereby, reputation is indispensability for underwriter in order to solve creditability problem and to win investor's belief. If underwriter loses its reputation, underwriter's function of"information producer"and"certifying agency"will lose foundation. Accordingly, reputation becomes an important mechanism to control underwriter's behavior, and to influence performance of security issuing market.In the processing of Initial Public Offerings, underwriters play an important role as financial intermediaries to solve the information asymmetry problems between firms and investors who provide the financing. Underwriter's reputation builds elimination mechanism which standards underwriter's behavior and keeps validity of the new-stock offering market. The elimination mechanism is indispensable for the security market. Share Splitting Reform has finished basically and the new-stock offering market is getting more matured with the issuance of new security-law. Therefore, it is of most importance to analyze underwriter's reputation, in accord with background of institution change of security issuance market in China.According to the analysis of this dissertation, there are kinds of reason, such as institution's defect, market structure's flaw, and regulation's failure. In the concrete, the reasons include administrative institution trend of security issuance, localization of underwriting business, lacking of underwriter's exit mechanism, un-market of IPO pricing mechanism, concurrence of over-regulation and insufficient-regulation, and defect in property right, and so on.On the reasons of failure of China's underwriter reputation mechanism and principle of reputation mechanism, in accord with background of institution change of China's issuance market of security, this dissertation studies the polices of how to reestablish underwriter's reputation mechanism and regulate underwriter's behavior.