Study On The Relationship Between The Earnings Management Before IPO Of GEM Companies With Underpricing

Since the development of securities markets, IPO underpricing has been the high-plagued China's stock market one of the major problems, while the domestic stock market in a series of earnings management of listed companies and financial packaging cases of exposure, making China the IPO market in the credit crisis. October 2009 National Strategy for independent innovation in China to provide financing platform for building multi-level capital market system, to support SMEs, particularly high-growth enterprises, launched the Growth Enterprise Market. High IPO underpricing phenomenon still exists in the Growth Enterprise Market, where the first batch of 28 listed companies, compared with the starting price, or more than 100% to 12. Mature stock market and foreign IPO underpricing is generally below 20%. Many studies show that domestic and foreign, IPO market conditions and the company to meet a higher offering price to raise more funds, and securities regulatory authorities by the asymmetric information between and incomplete contract, the earnings management. Misled investors on the one hand, on the basis of the integrity of the securities market have negative effects on the other hand, the optimal allocation of resources in capital markets also have a negative impact, and ultimately will undermine the confidence of the entire market, and long-term development.Through the specification of earnings from GEM IPO between management and the theory of underpricing, elaborates the relevant basic theory and relationship between earnings management and the intrinsic underpricing basic theories of economics, then with practice in companies listed on GEM of earnings before IPO management and underpricing the status quo, dialectical analysis of earnings management and underpricing phenomenon of the inter-relate realistically pointed out that the underpricing of hazards, such as easily lead to market bubbles and investment risks, increased stock demand and supply gap and damage the whole community the efficiency of capital allocation within. Then select the 2009-2010 IPO companies listed on a sample of 90, and a hypothesis:My GEM IPO issuing company before the IPO underpricing and the level of earnings management is significantly positive correlation. By using the modified Jones model 90 listed companies the year before IPO earnings management, regression model based on empirical research and then the samples before the company's IPO earnings management and the relationship between IPO underpricing. The empirical results show that, IPO before the greater the degree of positive earnings management, the greater its IPO underpricing, that positive earnings management prior to IPO IPO underpricing will result in increased positive test results consistent with prior assumptions. Which proposed to strengthen the supervision of IPO earnings management behavior to reduce underpricing, and proposed to further improve the relevant accounting standard system, strengthen supervision and securities regulatory authorities, auditors and rating agencies to increase monitoring efforts, and improve the internal governance of listed companies structure, improve the information disclosure system and other operational measures, thus the growth enterprise market healthy and orderly development to make its own contribution.