An Empirical Analysis Of IPO Underpricing Phenomenon And Its Influencing Factors In Growth Enterprise Market

After a decade of brewing, China’s Growth Enterprise Market (GEM) was finally launched on October30,2009in Shenzhen Stock Exchange. Launch of the GEM, not only conducive to high-tech enterprises, especially SMEs, financing, eliminating the effects of a shortage of funds bottlenecks in their development, but also conducive to China’s multi-level capital market, the establishment and improvement of China’s capital market system. It’s of great significance for the entire national economy sustainable development.However, the listed of China’s GEM also brings in some problems, IPO underpricing phenomenon is one example. Basically completed circulation in China’s stock market, the market further accelerate the process in the context of China’s GEM IPO underpricing phenomenon,therefore, the study has some theoretical and practical significance.The phenomenon oflisting Corporation’s IPO underpricing has long been known as a "mystery", and it is always the focus problem in the financial research. Based on summarizing and absorbing the previous theory and research results, with the use of economic and financial theory, and considering the characteristics of China’s GEM market, this paper analyses the IPO underpricing phenomenon of180listing Corporation in China’s growth enterprise market. To be specific, we start from the characteristics of China’s GEM, analyze theprimary market and the secondary market respectively, and then get the most important factors that affect IPO underpricing in China’s GEM. We could say, the result of this paper is significant to improve the efficiency of the Chinese capital market, to enhance the efficiency of enterprise financing, to optimize the allocation of financial resources, and to strengthen the supervision of capital market.This paper is divided into seven parts. Chapter1introduces the research background, purpose and significance, research methods and structure of the road map; Chapter2reviews the domestic and foreign IPO underpricing theories and empirical research; Chapter3introduces the influence mechanism of IPO underpricing; Chapter4analyzes the basic situation of China’s GEM from the course of development, function, operation and systematic risk; Chapter5firstlychoose the dependent variable and the independent variables of underpricing factors, then randomly select a sample of160stocks from the creation of the GEM market to date issue and give a descriptive analysis; Chapter6use multiple linear regression models and multivariate logistic regression model to investigatethe factors affecting GEM IPO underpricing; Chapter7summarizes the conclusions of this paper, and made a perfect GEM suggestions and countermeasures, based on the study of previous chapters on the GEM market systems.In the aspect of research method, this paper combines the qualitative analysis with the quantitative analysis:In qualitative analysis, we focus on the theoretical mechanism of IPO underpricingand the factors influencing the underpricing most. At the same time, we give a relatively complete index system. In quantitative analysis, based on the cross section data of China’s180enterprises, we use multiple linear regressions and multiple logistic regressions to look for the main factors. In the aspect of innovation points, this paper realizes the multifactorial quality in IPO underpricing, and grasps the main points in aspects like:the index selection of depth and breadth, combination of different regression models, the nature of China’s GEM itself.In the structure of this paper, the seven chapters are layer to layer progressive, from the shallower to the deeper, and transforming from qualitative analysis to quantitative analysis.The results showed that the success rate and the first day turnover are two important factors affecting IPO underpricing, both of which reflect the first and second market investor enthusiasm, which indicates that China’s GEM largely impact on the affected investor sentiment. On the contrary, the indexes reflecting fundamental information of enterprises have shown no significant, which explains to some extent, investors showed emotional investment, and lack basic information on enterprises.