A Study On Initial Public Offerings Underpricing Of Chinese Medium And Small Enterprises

Medium and small enterprises (SME) are chief components of economic society and industry structure, which are became new economic growth points and the most active productivity in China. However, finance blocked the SME's development. Initial public offering (IPO) is important measure for SME finance today. IPO underpricing became outstanding problem as well as motherboard. In this dissertation, the reason of SME IPO underpricing will be analyzed.Based on reviewing the native&external documents, this paper presents three theories of risk compensation theory, hot issue and Underwriter price stabilization, which are the theoretical basic of multi-linear regression and empirical research later. The main results of multi-linear regression and empirical as followings: first, p/e ratio, lot winning rate, industry and market hotness are the most important factors for IPO underpricing, essential information of company is unremarkable yet. Second, multi-linear regression model is reliable at a certain extent. Third, underwriter price stabilization extents in SME market and persist about 11 days. Forth, industry and market anticipation led excess early returns. Because of the actual data of underwriter price stabilization inavailable, the extent of impact on IPO underpricing needs further research.