Research On The IPO Efficiency Against The Background Of The New Distribution System Reform

Whether the IPO system is efficient not only determines the quality of the listed company and the efficiency of the stock market from the source, but also influences the confidence of investors and the steady development of the capital market. The new distribution system reform has been considered as the most important basic system reform after the equity division reform. On May 22,2009, the China Securities Regulatory Commission (CSRC) began soliciting opinions from the public regarding "on further reform and improve the new shares issued guidance system", which marks the beginning of a new round of IPO reform. During the next 12 month, more than 200 corporations have been listed on A-share market. Under the new distribution system, on the one hand the degree of under-pricing is lowered; but on the other hand, high P/E issuing, the broken stocks and excess funding had become the prominent problems, thus there exists widespread controversy regarding the effect of the reform.At the beginning, this paper makes a thorough explanation to the connotation of the new distribution system, and the behavior characteristics of the involved actors. Also the game relationships of these actors are analyzed. On the basis of domestic and international relevant research results, we use statistical and econometrical techniques to compare the pricing efficiency of the pre-reform issuance system with post-reform issuance system according to relative value judgment criterion. Then the Stochastic Frontier Approach is used to analysis the IPO efficiency after the recent reform. The multiple linear regression model shows that, although the offering price is even higher after the reform, it reflects more information about the corporate intrinsic value and thus has the rationality of its existence. The SFA model indicates that the deliberate IPO underpricing doesn't exist after the reform; On the contrary, the new stocks are probably priced too high.Furthermore, the paper also analyses the IPO efficiency from the views of the degree of underpricing, direct expenses, the time of listing, etc. Overall, the IPO efficiency has been improved a lot during the past decade. In analyzing the influencing factors of IPO efficiency in China, we put them into the single institutional arrangement which is the new distribution system, and the institutional environment. For China, the primary cause of the low IPO efficiency is that the institutional environment is relatively imperfect, which means that the market efficiency needs to be improved.In the end, we put forward policy suggestions on the basis of the theoretical analysis and empirical results. On the one hand, we should insist on the marketability reform direction; On the other hand, we need to improve the corresponding system environment, such as to improve the structure of the capital market and investors structure, to cultivate rational investment behaviors of investors, and to improve the efficiency of supervision. Thus the new distribution system will be functioning more effectively and the IPO efficiency be further improved.