Research On The Impact Of Private Equity On Enterprise IPO Timing

Since the introduction of private equity in China in twentieth century,the policies of supporting private equity's development have been launched.With the gradual improvement of the GEM board,private equity is enjoying a golden age.Thanks to private equity's IPO timing function,firms with private equity exhibit accurate market-timing ability at IPO.Therefore,the impact of private equity on IPO timing is one aspect that can not be neglected in the study of private equity.A combination of theoretical research and empirical research was adopted.On the basis of theoretical analysis,Mann-Whitney U test and Multiple Linear Regression were used to study the impact of private equity on IPO timing.The factors that influence the impact of private equity on IPO timing were divided into three aspects: internal factors,external factors and corporate governance factors.The sample data was selected from the GEM board during 2009 and 2016.First,a comparative analysis was used to compare the IPO timing behaviors of firms with private equity's support and those without private equity's support.This was followed by analysis of the impact of internal factors such as reputation on private equity's IPO timing behaviors,considering external factors and corporate governance factors.In the last,this paper provided suggestions both from private equity and enterprise point of view.This paper integrated private equity and enterprise into a whole analysis system,and this was of great value to private equity's IPO exit and the introduction of private equity in enterprises.The study found that the IPO process of firms with private equity was significantly shorter than those without private equity,indicating that private equity participation could accelerate the IPO process.The internal factors of private equity were state background,investment scale and reputation.The effects of non-state-owned private equity in IPO timing were significantly stronger than state-owned private equity.The investment scale of private equity and the IPO process were negatively related,but reputation was positively related to the IPO process.The external factors of a rising market and fierce competition in the private equity market could significantly shorten the IPO process.From the aspect of corporate governance factors,the higher private equity's relative shareholding ratio to controlling shareholders was,the more obvious the promotion role of IPO timing.However,the deviation of control rights and cash flow rights had no obvious effect on the IPO timing function of private equity.It was mainly because that the participation of private equity restricted encroachment behaviors of controlling shareholders,and controlling shareholders' effects in promoting IPO were delayed in the game playing.