Study On The Influence Of Stock Market Pricing System Changes To Initial Public Offering Of Stock Under-Pricing

Looking at the development of China’s stock market, the new shares issued by the highunder-pricing phenomenon has always been a general problem of A-share market, and it isalso the most criticized defect the A-share market.And it also led to inefficient allocation ofresources, poor market ecology, contributing to the many problems of fraud and illegalbehavior, distorted the market structure from the most basic level, determined the continuedlow of stock future trend, which is the so-called "bull short bears long”.High under-pricing ofA-share market, has long attracted widespread attention, and become a hot research amongscholars, and various theories explain emerge in endlessly. Of which the most well-knowninclude asymmetric information theory and based on recognized, as well as the "winner cursehypothesis" and "investment bank hypothesis". However, the A-share market, strong Chinesecharacteristics, apparently unable to be explained by these theories rooted in the maturemarkets of Western. Later, some scholars have tried to explain the high under-pricing ofChina’s stock market from the effectiveness of the capital market using the "speculativebubble hypothesis" and “investors excessive optimism", but having got a much more mutedresponse. Owing to the late development of China’s securities market and a series of problemscaused by the split share reform for the historical reasons, we must conduct a study on theIPO under-pricing combining with the special circumstances of our country and the A-shareIPO market system and evolution. In recent years, along with China’s economic reformaccelerating, China’s securities market regulators launched a series of market-oriented reformmeasures in IPO system. However, can the issue of new shares reform really solve the China’shigh under-pricing problem? how much influence does The IPO system to the IPOunder-pricing? It has a special meaning for the development of China’s securities market tosolve the problem.Based on this understanding and the analysis of the research status, this article discussesthe IPO under-pricing from two aspects of theoretical and empirical aspects starting fromChina’s actual conditions. On the theoretical side, first, cited many factors affectingunder-pricing of IPO shares and their relationship, expound the basic situation of IPO under-pricing of new shares, and review the process of China’s IPO institutional change;Secondly, using the institutional change theory of the new institutional economics, analysesthe influence of IPO under-pricing by the system of China’s IPO, of which each of the threeaspects-the IPO audit system, the pricing mechanism of issuing new shares, the IPO way–to be examined; Finally, draw a conclusion: the fundamental reason to high IPO under-pricingis the non-market factors in China’s IPO system, and pointed out that it is because in recentyears regulators introduced market-oriented reforms in the IPO system that making IPO highunder-pricing phenomenon improved. On the empirical side, in order to verify the influenceon IPO under-pricing by the system of China’s IPO and its historical reform, the articleselected2,325new shares of the1992-2011A-share market as a sample, and select the size ofthe IPO, the IPO date and the listing of the first day of the interval several market-orientedreforms of the period, the issue of price-earnings ratio, IPO first day turnover, issue costs ascontrol variables, construct analysis model, descriptive statistics and variance analysis, andfinally concluded-China’s IPO system factors affect remarkably China’s IPO under-pricing.On the basis of the theoretical and empirical analysis, this paper put forward some policysuggestions in order to solve the problem of under-pricing of new shares issued and toward ahealthy direction in order to facilitate China’s stock market.