Research On The Influence Of Characteristics Of Ultimate Controller On IPO Underpricing Of The GEM Listed Companies

Since the 1990 s,China’s capital market has gradually become an important carrier of corporate finance and investment,along with the continuous progress of the economic system reformation.With the opening of SMEs board in 2004 and the launch of the GEMs board in 2009,China has gradually established a multi-level capital market system,which activate the private capital and promote the small and medium-sized enterprises’ capacity and scale.What’s more,boost the development of the real economy far-reaching implications.However,in the process of high-speed development of multi-level capital market,there are still many deep-rooted problems and structural contradictions,which reduce the efficiency of market allocation,for example,the high IPO underpricing.There are different levels of IPO underpricing in capital market in the world.The research shows that the IPO underpricing rate of the developing country market is much higher than that of the developed country market,and the IPO underpricing phenomenon of our country is particularly prominent.The too high level of IPO underpricing will reduce the market allocation efficiency,which will directly damages the interests of small shareholders.As one of the major financial strategic decisions,IPO reflects the decision-making efficiency of the corporate governance.So what is the main factors that led to the corporate IPO behavior? In recent years,the study found that the ultimate controlling shareholder determine the difference of voting rights and private interests by controlling the pyramidal structure characteristics and their own attributes through separation of control and cash flow rights,which affect the company’s governance decisions.So will the ultimate controller characteristics have an impact on the IPO corporate behavior,thereby improving the IPO underpricing rate in the non-fully effective market? What is the affected mechanism? Therefore,based on the above-mentioned problems,this paper reveals the mechanism of IPO underpricing from the study of the characteristics of the ultimate controller,so as to improve corporate governance efficiency and improve the efficiency of market resource allocation.The paper uses the combination of normative research and empirical research.Firstly,it reviews the influential factors of IPO underpricing rate and the ultimate controller characteristics in the related domestic and foreign literatures.Secondly,it defines the related concepts and theoretical basis of this thesis.Then select the 291 companies listed on the GEM listed in 2010-2015 as a sample.By hand collecting,sorting out and summarizing from their prospectus,the listing annual financial report of the previous year and the stock market return index listed on the first day,the paper summarizes the market performance on the first day of listed stocks and the characteristics of the ultimate controller of the pre-market enterprises.Then through descriptive statistics,correlation analysis,multiple regression analysis and other empirical research methods to find what effect the IPO underpricing rate.The results shows that there is a significant positive correlation between the degree of separation of voting rights and private interests between the ultimate controller and the IPO underpricing,but the pre-IPO venture capital or private equity investment will weaken this effect.Meanwhile,the ultimate controller family control and IPO underpricing rate was significantly negative correlation.Finally,based on the above research results,this paper puts forward the countermeasures from the government level and the enterprise level,hoping to reduce IPO underpricing rate,improving the quality of listed companies on the GEM,the innovation-driven performance,and China’s capital market environment.