An Empirical Research On Ownership Structure And Ipo Underpricing

The IPO market involves many participants,including governments,enterprises,intermediaries and investors.It's a bridge between enterprises and investors,an important financing method for enterprises and the fundation for the second market.Therefore,carrying on researchs in this field is of great useful.The "IPO Underpricing"phenomenon has been early confirmed by the financial researchers since long ago.Economists around the world have devoted much time and energy on it,but there is still no theory could explain this problem perfectly.In China's IPO market,for a long time,the IPO first day return has been at an exceptional high level.,which,Until now, has not been explained convincingly.In china,scholars pay most attention on the pricing system and conclude that it is these special system which result in the high IPO Underpricing ratio.However,they concern the aspect of ownership structure least.Based on data of China's A share security market between 2001 and 2007,this dissertation studied the degree of the IPO undrepricing in China's stock market and its influential and decisive factors in ownership structure aspects by empirical analyses.Different from other papers,This paper admits the result obtained and it further analysize how different ownership structure influence the invester's expectation about the value of the issuer which is also cause high IPO Underpricing ratio.This paper firstly introduce the background of study and review the research on IPO underpricing by equity structure. Secondly,the paper analyse the special issuing mechanism and find that the issuer have no motivation to undervalue the issue price because of the equity separation and the government regulation in China.The real reason for high return on the first day,in china,is the bubbles in the trade market which is the result of the hot trade of the investers.The paper also analyse the factors which attact the investers most by agent theory and signaling theory.Then by emprial test,It demonstrate that there is a positive correlation between the IPO underpricing and the ownership retention and also the ownership concentration ratio of the listing companies.And there is a negative correlation between the IPO underpricing and The stocks hold by company and individual.However,the stock hold by state and the ownership balance ratio failed to illustrate the "IPO Underpricing"phenomenon.The result tells us that higher ownership retention and concentration ratio signals higher quality of the firm and the increasing number of current share is a help to decrease the IPO Underpricing ratio.Finally,The suggestions is thatto stick to the market orientation for IPO issue,to perfect ownership structure,to improve the quality of disclosing information,to enhance information supervision,to improve the quality of the listing companies and to right the behaviors of the investers in the stock market of china.