Empirical Research Of The Long-run Performance Of IPO Stocks In A-Share Market Of China

IPO, initial public offering, is refers to the enterprise hired underwriters to issuing shares to investors publicly for the first time. In the IPO market, many scholars have found IPO long-run underperformance in the securities market in different periods and regions, but there are still some conclusions of the study do not support the IPO stock long-term underperformance. the relevant theoretical research conclusions of the IPO underpricing are basically the same, but the research on the long-run performance of the IPO shares still has a lot of controversy. The research on which model is more suitable also has not reached a unified opinion.Relevant research has shown that, under different system of IPO, the long-run performance of IPO stocks is different.This study examines the long-run performance of327Chinese IPO stocks over the period2005to2009, when the IPO system implements the inquiry system. Using the model of CAR and BHAR, we find no significant long-run underperformance with the equal-weighted or value-weighted models. Since the conclusion is different with related research, there must be some difference in the A share market of China compared with other market. Furthermore, this paper examines the relationship between the long-run performance of IPO stock and issue size/initial return/year of issuance/age/amplitude on the first day/the rate of change of the proportion of circulation/book-to-market ratio. The innovation of this paper lies in that the period of the sample stock and the new variable of the rate of change of the proportion of circulation. The research results have certain reference value for China’s reform of the IPO, also is very worthy of the attention of our investors.Finally, according to the empirical results and the shortage, this paper also points out the further research direction. Whether the listed companies or investors, are constantly summarize previous experiences and lessons. Therefore, IPO shares in the long-term performance require further empirical research to verify.