The Gem Ipo Underpricing Phenomenon Empirical Study Of Listed Companies

Since China’s GEM market was officially launched in October2009, it opens the capital door to help the innovative companies to raise the necessary funds. Behind the secondary market investors keen speculatingnew issue, some phenomena is worthy of our careful study. This paper focuses on IPO underpricing.As to IPO underpricing problem, the scholars at home and abroad have studied a lot, and developed the principal-agent theory, the winner’s curse theory, signal theory, the litigation avoidant hypothesis, the underwriter reputation hypothesis, the follow-up financing hypothesis, the ownership dispersion hypothesis and some other theories of behavioral finance. As to the VC impact on the IPO underpricing, it have developed Certification theory, Screening and monitoring theory, Adverse selection effect theory and Agitation effect.Innovatively, this paper focuses on the effect of venture capital institutions to the company’s IPO underpricing rate from the point of view of the GEM companies’capital source. We take the GEM samples, and then use SPSS to do the independent samples T-test and multiple regressions to test the impact of various factors on the IPO underpricing.The final empirical results show that on China’s GEM market whether it is a venture-backed company has no significant effect on the IPO underpricing. About the policy recommendations, we suggest that we should start from the proposed reform of issuing new shares, the market trading system, as well as investor education and other aspects, optimize the mechanism of the pricing of shares, and improve the efficiency of capital market funds’allocation.