Background Characteristics Of Board Secretary And IPO Underpricing

IPO Underpricing refers to,after initial public offerings,the phenomenon that the first-day market closing price is much higher than the issuing price.Obviously,this will make the issuing companies suffer the huge losses in profits.In the background of IPO pricing inquiry system,the information asymmetry between the internal environment and external environment of enterprises tends to constrain the price investors offering,which cause IPO Underpricing.Therefore,the information asymmetry composes one of essential factors leading to IPO Underpricing.According to Upper Echelon Theory,background characteristics of senior executives will exert an impact on their behaviors selections as well as the performance of company.The board secretary in China,who coordinates the relationship between company and investors and acts as the information publisher,can also influence IPO Underpricing with his/her personal background.Considering all kinds of factors influenced to IPO Underpricing,such as the information asymmetry of GEM(The Growth Enterprise Market),suspension of IPO in 2013 and new policy in 2014,using GEM sample in China between 2009 and 2012.I tests the relationship of background characteristics of board secretary and IPO Underpricing.And I concluded that the board secretary with financial background,serving as CFO,and related working experience can reduce the IPO Underpricing;however,if the board secretary holds the company Stock,that would increase the IPO Underpricing.Based on which the conclusion has been drawn that the personal background characteristics can influence IPO Underpricing and further affect the IPO pricing efficiency,hoping to provide reference for enterprises to recruit the right person for board secretary.