An Analysis Of IPO Effect And Influencing Factors Of Small And Medium - Sized Listed Companies In China

This paper selects90listed companies which went to public during2009, as a research sample, aiming at analyzing the IPO effect and compare the differences of SME board and GEM board in China. We find listed companies from both of SME board and GEM board existed the so-called IPO effect, however, there are two important differences between SME board and GEM board. Firstly, listed companies from GEM board have greater decline in ROA and EBIT/A which are indicators of operating and earning abilities of the listed companies than those from SME board. Another difference lies in the time of performance recovery circle from post-IPO decline. GEM board listed Companies’ performance adjustment cycle is relatively shorter.This paper takes six indicators which could be used for reflecting the abilities of sample companies and combines with relevant theoretical hypothesis, empirical analysis the factors that cause IPO effect. As a result, We find the proportion of the largest shareholder is negatively related to the operating performance of SME listed companies and significant; positively related to that of GEM listed, but not significant. Asset turnover ratio is positively related to both, but only significant for SME listed. Venture capital has different but not significant effect for the two boards. Debt/Equity ratio has a promoting effect for performance for both significantly. IPO underpricing rate significantly affects GEM listed companies’ IPO effect. Companies listed in SME board from developed area have significantly poor performance after IPO than the GEM peers.We also analyze the reasons of two differences between boards. Finally, we put forward some suggestions.