Research On The Relation Between The Prospectus Information Disclosure And IPO Underpricing

Along with the reform and development of our country financial market, China’s stock market also rapidly changes. Also, the economic development of our country has promoted our country’s stock market boom, especially the number of the listing corporations in the stock IPO market has been rising. Although since the outbreak of the international financial crisis in2008, the speed of the world economic development almost remain stagnant, or even worsening, at the same time, the European debt crisis and the dollar crisis further deepened this financial crisis. Our country’s economy has been affected by the international financial crisis, and the stock market has considerably concussion, however, thanks to the higher price-earnings ratio of initial public offering, a large number of domestic enterprises pursued IPO for money. In addition, the government increased the economic stimulus, so the enterprises of our country still have new projects, new products and new dimensions of financing demand to develop, therefore, the IPO financing is still by favor of the listing Corporations, and this became the main channel that the listing Corporations expand their scales and innovation financing. On the IPO financing market research, the focus lies in the IPO underpricing, and also the IPO underpricing problem is a common problem in the financial market. At present, domestic and foreign scholars have formed a theoretical research system about the issue of the IPO underpricing problem, and these famous theories include:the principal-agent theory,"winner’s Curse" theory, signal theory, investor sentiment theory and so on. These theories explain the IPO underpricing factors from the aspect of information asymmetry or from the behavioral finance. However, some of these theories have not been proved effectively in China’s securities market, that is to say, these theories can’t efficiently and totally explain the high IPO underpricing phenomenon in China’s securities market. However, with the development of our national economy and the increasing improvement of the market environment, as an important enterprise financing means, IPO has obtained the considerable development, so it is very necessary to study the affecting factors of the high IPO underpricing in China.In this situation, how to efficiently distinguish the differences between the foreign and domestic issuing system besides the issuing way di, how to distinguish the Similarities and differences between domestic and foreign IPO underpricing factors, how to use the foreign research results to improve our IPO pricing efficiency, to effectively preventing the IPO market speculation, how to break through the traditional study to open a new research thinking, to explore the other factors about the IPO underpricing, so as to provide a new interpretation idea of IPO underpricing, to help the financial supervision departments improving the efficiency of the IPO regulatory policy. All these problems remain to be resolved in the present securities issuing market.This article draws lessons from the related research results of domestic and foreign IPO underpricing, on the basis of this, in view of the market characteristics in our country’s stock market, this article simply analysis the traditional factors of our country’s IPO underpricing, and then from the new study concept, measures the IPO prospectus disclosure quality, so as to study IPO prospectus disclosure quality on the effect of IPO underpricing. The main research contents and innovations of this article are as follows:First of all, this paper selects the IPO prospectus issued after March2001of the SSE as the research sample, and transfer the PDF IPO prospectus to WORD IPO prospectus, and then on this basis, in accordance with the prospectus of the different components set the ambiguity variables to representing the prospectus disclosure quality, to study the relationship between IPO underpricing and these variables. Secondly, this paper contains multiple variables to explain the IPO underpricing, and these variables have been validated to be effective factors by the previous IPO underpricing theories. At the same time, this article also analysis the prospectus information disclosure, and the ambiguous variable has been used to measure the quality of the prospectus information disclosure information. This ambiguous variable innovative explain the role of the quality of the prospectus information disclosure in the IPO underpricing. Again, this article use the multiple linear regression method to analysis the influencing factors of the IPO underpricing, and then analysis the importance of the ambiguous variable in interpreting EPO underpricing, thereby this method will be creative to IPO underpricing factors in our country.The result of this paper shows that, the IPO underpricing rate in China’s stock market is significantly higher than that of western developed countries. This high IPO underpricing phenomenon both from domestic and international common influence factors, at the same time also stems from the unique influence factors of our country. By the linear regression analysis, the quality of IPO prospectus information disclosure has significant positive with IPO underpricing rate. The ambiguous level about the prospectus disclosure is higher, the higher the rate of return on the first day of new shares, namely IPO underpricing rate is higher, and IPO pricing efficiency is lower. The ambiguous degree about the prospectus disclosure is lower, the new first day return rate is lower, namely IPO underpricing rate is lower, also IPO pricing efficiency is higher. This paper shows that IPO underpricing rate and the ambiguous degree of the prospectus disclosure is positively related.This study will have important practical significance in studying the affecting factors of IPO high underpricing in our country high underpricing phenomenon, at the same time it also have the important guiding significance for China’s securities regulatory departments to strengthen our country’s stock market information disclosure regulation. The study has opened up new roads for researching IPO underpricing phenomenon in our country, and also has milepost sense on the study of the quality of prospectus information disclosure. It contributes to prevent the speculative risk in stock issuing market, to maintain the stability of the stock market, and improve decision-making efficiency of the regulatory and so on.