Study On The Impact Of Stock Issuance System To IPO Pricing Efficiency

The pricing of IPO is the core step of market segments.The pricing is reasonable or not has a direct impact on the efficient allocation of resources of stock market.The theoretical study of overseas IPOs has been more mature, but it is based on mature markets. However, these theories can not fully explain China’s low IPO pricing efficiency and can’t guide the rate of China’s capital market system because of the liquidity constraints of China’s capital market, the immature development of institutional investors, etc.This article aims at describing the IPO pricing efficiency and comparing pricing efficiency among different stock issuance systems according to the combination of theory and empirical methods. Meanwhile, the article can help us have better understanding of the characteristics of the market and the principles of the market. It can also provide investors and policy makers some useful inspiration.Looking back on China’s stock market after twenty years’development, there are many questions appear, such as whether the reform of system to resolve the issue of IPO pricing efficiency, how impact of the three components of the stock issuance system on the IPO pricing efficiency, etc. The article attempts to answer these questions via empirical study.The article consists of six chapters as following.Chapter1:Quotation. The first chapter comes up with the problem of low pricing efficiency and introduces the research ideas and research methods. At the same time, it gives us an introduction of the domestic and international IPO pricing efficiency on the theory and empirical research.Chapter2:The transformation process of China’s stock issuance system. This chapter reviews the transformation process of the stock issuance system from three aspects:the new issue approval system, pricing mechanisms and the new issue mode.Chapter3:We want to measure China’s value of IPO pricing efficiency, which is a relative efficiency, by a nonparametric method, namely DEA method. We just need to consider the situation of primary market, excluding the influence of secondary market.Chapter4:Under the large sample, the stock issuance system will be subdivided into three parts:new issue approval system, pricing mechanisms and the new issue mode, in order to study their impact on the rate of IPO pricing efficiency and to compare them.It concluded that all of the three parts have an impact on IPO pricing efficiency.Chapter5:From the aspects of stock issuance system,we explore the methods to improve the IPO pricing efficiency, in order to analyze the feasibility of registered approval system and give many opportunities to individual investors.Chapter6:The conclusion and limitation of the paper. On basis of above empirical study and analysis, this chapter gives the final conclusion and point out several limitations of the paper.