Specific Assets And Brokerage's Strategic Pricing On Underwriting Service

China's securities market is evolving and developing in continuous practice and reform.The construction of a multi-level capital market system,the deepening of the reform of the new share issuance system and the implementation of system innovation and product innovation,which promote the maturity of the securities market.At the same time,the function of the securities market to provide investment and financing services for enterprises has also become increasingly prominent.Brokers,as service organizations that are active in the securities market,play a vital intermediary role in guiding corporate financing and optimizing resource allocation.To a certain extent,it has become an important bridge for the connection between enterprises and capital market.Issuance cost,particularly,is the focus of corporate financing.With the adjustment of China's stock issuance system,the pricing of investment banking service has also becoming more market-oriented and transparent.It can not only elaborate the characteristics of financing services but also provide reference for both companies and brokers from the analyzation that on the company's decision on the selection of cooperative brokers and the factors which determine the financing fees in the current securities market environment.In addition,the studies on intertemporal linkage of issuance fees between initial issuance and seasoned issuance also opens a new perspective for investigating pricing for investment banking services in the securities market.This paper focuses on listed companies that existed between January 2002 to December 2015 and have seasoned equity offering during this period,explore the strategic pricing of underwriting fees by empirical analysis.Based on the theory of specific assets and quasi-rent theory,we put forward three hypotheses and verified them one by one.First,when analyzing the issuance of listed companies,whether they are willing to continue to cooperate with the original listed underwriters,we used the depreciation characteristics of special assets to verify the influence of specific assets on company decision making,and then conducted comparative analysis with other mechanisms.We found that specific assets played an important role in influencing the decision of listed companies to continue the cooperation with underwriters.What's more,its influence is even much higher than the underwriters' reputation,corporate nature,etc.And this phenomenon is significant in the main-board market and small and medium-sized board market.Second,we conclude that due to the existence of specific assets,if a listed company decides to continue to cooperate with the original underwriter at the time of additional issuance,it will tend to pay lower fees in the current period.The underwriter is often willing to accept,because customer demand is the premise of business development,the price reduction of the current service fee is a normal reaction of the broker to maintain the customer relationship.Finally,securities companies are for-profit institutions,pursuing profit maximization.They will earn quasi-rents from specific assets to make up for initial losses by increasing the underwriting fees of listed companies when making seasoned equity offering.And the lower the initial issuance fee rate,the higher the rate at the time of seasoned equity offering.As a result,underwriting fees show an intertemporal alternative relationship between the company's listing and subsequent equity offer activities.