| Ⅰ.Significance of the ArticleIPOs(Initial Public Offerings) is a behavior that a company sells its stocks(common stocks) publicly to investors on the stock market for the first time.IPOs long-run underperformance is the fact that investors buying IPO shares on the secondary market earn substantial negative abnormal returns over longer horizons.According to the Theory on Efficient Market,the excess earnings of new shares should not exist for a long time after listing,because many profit-seeking behaviors may cause the disappearance of excess earnings. But the overseas empirical studies manifest that the phenomenon of IPO Long-Run Underperformance of a new share widely exists in most countries'stock market. As for long-term returns of new stock on our stock market, there are different conclusions in our country. Whether IPO Long-Run Underperformance exists in China or not is still disputed. We need use both theoretical and empirical studies to reveal China's IPO Long-Run Underperformance and its causes,thus we can provide useful suggestions for the investors on one hand ,and put forward the related policy suggestions for the government in order to promote the healthy development of our stock market on the other hand.Ⅱ.The Basic Clue of the ArticleAfter IPOs long-run underperformance was put forward in 1990's,western scholars gave different explanations for this phenomenon. The main theories are Heterogeneous ExpectationsHypothesis, Fads Hypothesis, Windows of Opportunity Hypothesis, Price Support Hypothesis and Overpackaging Hypothesis.China's stock market now is in a special time of transition to "double-track system". Only under our specific circumstances can we use foreign models to analyze IPO Long-Run Underperformance.Thus, considering the specific institutional background and based on the theoretical analysis and empirical studies on Long-Run Yield Rate of China's A shares, we are led to the fundamental causes of China's Long-Run Underperformance.Firstly this paper reviews the available literatures and points out the main weakness of the present research. Secondly it takes an empirical study on China's IPO Long-Run Yield Rate, and finds out the phenomenon of Long-Run Underperformance of new shares existing on China's A share market. Thirdly, under specific institutional background of our securities market, based on the principle of shares pricing,"Overpackaging Hypothesis" and "Lemon Model", it analyzes the causes of China's Long-Run Underperformance. Then, according to the results of data survey, this paper carries out multiple-factor regression research on Long-Run Yield Rate and its influence factors. Finally this paper points out that IPOs long-run underperformance is not beneficial to the healthy development of China's stock market, and it gives related policy suggestions.Ⅲ. Contents and Main Ideas This paper is divided into four parts.The first part reviews the available IPOs Long-Run Underperformance literatures in the world and points out the main weakness of the present research.The second part makes an empirical study on China's IPOs Long-Run Yield Rate, and finds out the phenomenon of Long-Run Underperformance of new shares existing on China's A share market.The third part elaborates systematically the causes of China's IPO Long-Run Underperformance. It points out that under China's institutional environment, the listed companies usually have overpackaging behaviors；After listing, the financial standings of the listed companies widely descend； When the investors find out the bought shares are not so good as what they expected, they will give a lower price for the shares；Thus the real financial standings of the company reflect on the pricing fluctuation, and IPOs long-run underperformance appears．The fourth part makes multiple-factor regression research on China's IPO Long-Run Underperformance and its influence factors, and gives constructive policy advice.Ⅳ.Main FindingsThis paper finds out that the phenomenon of Long-Run... |
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