Research On The Relationship Between Working Capital Management And IPO Underpricing Moderated By Top Management Team Characteristics

As the phenomenon of company’s initial public offering, IPO underpricing has received the attention of many researchers. Working capital management has become the market investors’ important reference of choosing investment objects because it can influence the price of IPO by indicating the situation of the company. The characteristics of top management team can affect the relationship between working capital management and IPO underpricing by affecting management team’s ability of acquisition, analysis and handling events.Based on the capital-control theory, information symmetry theory and information asymmetry theory, this study constructs the regulation model of working capital management and IPO underpricing, and at the same time, the study searches the moderating effect of top management characteristics based on the upper echelons theory. The study chooses the data from 2006 to 2014 A-share manufacturing listed companies as samples for empirical research. Research results show that the cash turnover period has a significant positive correlation with IPO underpricing, and top management team average age has a significant positive moderating effect between cash turnover period and IPO underpricing, and the education level of top management team has significant negative moderating effect between cash turnover period and IPO underpricing.This paper has important reference significance to the manufacturing company of making working capital management strategy and the top management team construction. Manufacturing listed company can reduce the cash turnover period, improving the efficiency of working capital management to reduce the IPO underpricing, so as to avoiding its financing losses resulting from the IPO underpricing. At the same time, they must focus on the top management team construction, decreasing the top management team’s average age and improving overall average education level, which is of positive significance for enterprise on the performance of working capital management and the capital market.