| With the growing requirement of IPO reform, people are paying more attention to IPO underpricing.2007 has witnessed the dramatic change of stock market index in China.2006-2007 is a happy and crazy time for Chinese investors. The Shanghai (securities) composite index soared up to 6000. But the disaster came at the end of 2007. The Shanghai composite index fell down to 3000 in few months. Miracles did not happen as expected and the index fluctuated around 3000 from then on.7 years have passed and good news came finally, though a little late. From the early time of this year, singles show that the stock market has come alive with the series of policies issued by the government. Recently, the People’s Bank of China (the Central Bank of China) announced the reduction of interest rate to promote the investment passion in society. With the good news mentioned above, a good many Small Medium Enterprises (SME) hope ti grasp the opportunity to raise fund though IPO. But this time Chinese investors are more calm and reasonable than before. Not only do they care the investment environment, but also do research of the Top Management Team (TMT). As the core of the TMT, the characteristic of CEO draw the attention of investors naturally. The purpose of this paper is to find the possible relation between the characteristic of CEO and IPO underpricing rate, and provide reference to help investors make wiser choices. With the analysis of data from 347 companies in Second-board Market from Sep 25,2009 to Sep 24,2012, we found obvious positive correlation between IPO underpricing rate and CEO education, and obvious negetive correlation between IPO underpricing rate and CEO payment. Moreover, the results suggest that CEO age, CEO duality and CEO’s working in other company should be taken into consideration because their effect on Venture Capital backing, total assets, gross operating income and the scale of equity expansion. |
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