Investor Sentiment,Firm Size And IPO Underpricing

IPO underpricing means the first day closing price on the first day when widespread closing of the first issue of listed companies in the market is higher than the issue price of the phenomenon,the phenomenon of IPO underpricing prevailing in the global capital markets,whether in developed or developing capital markets the capital markets,which underpricing developing capital markets more serious.China's stock market has so far belong to the emerging developing capital markets,IPO underpricing problem is particularly serious,because of China in 2014 before the first day of listing of new shares did not implement the limit system,which led to some of the stock even in the listing date underpricing reached more than 100%.Underpricing of IPO anomalies longstanding attracted the attention of a large number of scholars,from the 1980s,some scholars on the issue of China's IPO underpricing conducted a lot of research and get some results.Researchers study abroad to China IPO underpricing phenomenon mainly in the secondary market under the prerequisite for effective market considers IPO underpricing is mainly due to the issue price in the primary market,caused by the low,our researchers In developed countries,the use of the theory of the primary market underpricing of IPO underpricing phenomenon empirical study,we found that our IPO underpricing phenomenon is not simply use to explain the low level of market pricing,as a result of China's capital The market is in a state of budding start,various rules and regulations are not perfect,so for China's capital market,the secondary market for effective whether rational market is still debatable,the same whether our IPO underpricing by two The impact on the market irrational emotions need to be studied,and the traditional theory for IPO underpricing study did not relate to the secondary market,so this article will use behavioral finance a new perspective on China's IPO underpricing research.Behavioral finance in the late 1980s,the difference compared with conventional finance is mainly focused on behavioral finance research from non-rational aspects of investors such as preferences,convictions investors,and traditional Finance theory mainly on the assumption that the secondary market is studied under the premise of rational and effective.IPO issuance mechanism of inquiry system introduced from 2005,the inquiry system refers to a company'sstock price when underwriters and issuers to issue price determined in accordance with the needs of a floating range of the market,and then follow the majority of investors feedback prices to determine the issue price.Inquiry System is a comprehensive market-based pricing system,in theory,should be able to reduce the degree of underpricing of the IPO,but the situation after the implementation of the inquiry system point of view,China's IPO underpricing phenomenon is still high the existence of this phenomenon is closely related to market volatility,which indicates that the inquiry system of market-based pricing of the IPO change our IPO underpricing phenomenon did not play any role.For this reason,the paper angle of behavioral finance to irrational conditions from the secondary market to study the issue of IPO underpricing.The paper is divided into five parts,the first part introduces the research background and significance of research papers at home and abroad Review proposed research ideas and research framework of the paper,and put forward the innovation of this paper.The second part introduces the IPO market sentiment on the country and the first day of IPO underpricing analysis related to the status quo that the irrational investor sentiment on the secondary market may be the cause of the high IPO underpricing.The third part of the first theoretical model to explain the use of foreign investor sentiment affects asset prices;then introduces two theoretical models deviation performance and foreign-related;and the establishment of IPO pricing model to explain the impact of investor sentiment on IPO underpricing;final proposed hypothesis.The fourth part is empirical,the main use of multiple linear regression approach to the relationship between investor sentiment and the relationship between IPO underpricing and the issue size enterprises and between IPO underpricing were tested,and make a reasonable empirical results explanation.The fifth part of findings and recommendations,and explained the shortcomings of this study and make research prospects.This article has the following significance:(1)In this paper,multiple linear regression model by setting a reasonable relationship between the variables to be tested on investor sentiment and the IPO underpricing between the test results to determine if the secondary market is not valid,irrational,you can explain the irrational behavior of investors is the impact of one of China's market-share IPO A major reason for excess returns.(2)To determine if the test is no obvious correlation between investor sentiment and IPO underpricing,you can explain the mood swings of the secondary market has no effect on the price of the IPO,secondary market trading price to reflect the true value of the company,at the same time also explains the phenomenon of underpricing of IPO issuance was mainly due to low level of market pricing caused.