The Study Of The Influence Of Board Heterogeneity On The IPO Underpricing On Chinese Growth Enterprise Board

GEM in China has been started for more than three years since the October 2009 and 355 companies listed on the GEM during the period. GEM provides a platform for the further development of start-ups in China. IPO plays a prominent part in transition phase of start-ups. It is of great importance to implement a research on a company in that phase, which will facilitate company that will be listed soon to take advantage of IPO for development.IPO underpricing is common in various countries. Due to our unique examination and approval system, IPO underpricing phenomenon is more remarkable in China. IPO underpricing has been sprung up in Western in 19th century’s. Both financial scholars and managerialist showed great interest in it, and then they contributed a great number of literature and theories to IPO underpricing. These theoretical and empirical results were studied from all angles, but there is not a perfect theory that can interprets IPO underpricing. However, there are distinctions in listing system, capital market environment and investors between different countries, it is impossible for a universal theory to explain the phenomenon. In the process of IPO, issuers provide the very considerable interest freely to investors, the cost is expensive. So far, scholars are still trying to explore the mysteries behind the IPO discount. Research on IPO underpricing is still hot.Asymmetric information theory is relatively perfect in the theories about IPO. The basis of the theory is that information between the IPO’s main participants (issuers, underwriters and investors) is not asymmetric, the process of IPO pricing are to be carried out by related parties to game equilibrium. While in the game the process of signal transmission is contributed to the final equilibrium. According to the provisions of the securities supervision institutions, issuers needs to be disclosed the information about the company to the market in an IPO, including corporate finance, operations, management, and senior executives and directors for detailed. This information as kinds of signal include the true value of company is transmitted to the investors. Investors based on their cognitive abilities, according to the publisher’s message to the issuer’s stock valuation, decided to buy the stock in what price.Board occupies a very important position in the development of the company, especially for start-ups. The major strategy of the company depends on the members of the board of directors after coordination communication decisions. So investors much value the composition of the board of directors, and careful study on the disclosure of information. Heterogeneity of board as a important factor that affects the decision-making function is bound to get special attention. We according to the board of directors is responsibility and heterogeneity of IPO discount the impact of four hypotheses are put forward. One of the three hypothesis has been proved in the empirical model. To sum up, this article is based on the theory of asymmetric information theory and signal transmission to the gem listed companies empirical research in our country, in order to find the board heterogeneity influence on IPO discount, and this effect the author deeply analyzes the process of.The first part of this article puts forward the research question and states the theoretical and practical significance of this paper. The second part is literature review. At first the part elaborates the definition of two main concepts of this research, then reviewed the relevant theories and empirical researches. The third part is the research hypothesis, first of all the part introduce the theoretical basis to support this paper, then inferred four research assumptions of this article.,Fourth part is the research design and methods, this part mainly introduces the research of the independent variables and dependent variable and control variables, and introduces the measurement and research methods of those variables. The fifth part is the empirical testing, this part firstly through SPSS software analysis descriptive statistics for each variable; Then the part details data analysis and hypothesis testing; finally, the empirical test results are analyzed and discussed. The sixth part divided into Suggestions and the future research; this direction firstly describes the study’s contribution of this paper; and then presented the deficiency of the research; in the end, we prospect the future research direction.