Market-oriented Reform Of Ipo System,Earnings Management And Ipo Pricing Efficiency

Since the 1990 s,China's capital market has grown steadily;the number of listed companies has continued to increase;and the market's ability to invest and financing has continued to increase.All of these has made outstanding contributions to the rise of China's real economy in recent years and its embarked on the world stage.However,China's capital market is still “young” and the rules and regulations are still not perfect.The new share issuance system still remains in the approval stage.Under this background of the system,various problems have arisen in the actual operation of China's capital market,such as IPO underpricing,new stock breakage and financial fraud,which further led to the instability of the capital market and caused serious negative impact on economic development.In response to the above issues,the CSRC has made a series of efforts,including the six rounds of new share issuance system reform since 2009.Combining the research literature of domestic and foreign scholars,this paper uses the principal-agent theory and information asymmetry theory as the cornerstones to explore the correlations between the macro-level market reforms of the new share issuance system,the company's micro-level earnings management,and the IPO pricing efficiency.Finally,this paper uses data of the initial public offering company(A shares)from 2007 to 2017,and uses multiple regression analysis methods to verify the correlations.This study finds that: First,the market-based change in the IPO system since 2009 has significantly reduced the possibility of companies implementing earnings management before the initial public offering;second,the earnings management behavior of companies prior to the initial public offering has significantly caused the issue price of new shares to deviate from the intrinsic value of the company.In addition,this paper finds that the market-oriented reform of the new share offering system since 2009 can weaken the positive correlation between the two to a certain extent,but the effect is not significant;Third,the marketization reform of the IPO system since 2009 has significantly reduced the IPO pricing deviating rate.There are three innovations in this paper: Firstly,from the perspective of institutional change,we discuss the governance mechanism of earnings management and IPO pricing deviation.So far,many scholars at home and abroad have often inspected third-party agencies such as securities companies on the impact of earnings management and the pricing of new share offerings,while ignoring the macroeconomic policy environment.At present,China's capital market is in a phase of change.It is unreasonable to ignore institutional changes and simply study earnings management and IPO pricing efficiency governance mechanisms.Secondly,it enriches the research on the correlation between earnings management and IPO pricing efficiency.There are few studies on the correlation between the above two documents in the past literature and the conclusions are very different.This paper studies the correlation between the two based on the perspective of the market-oriented reform of the IPO system and enriches the relevant research.Thirdly,the IPO pricing deviation rate is used to reflect the IPO pricing efficiency.The IPO pricing deviating rate can measure both high or low pricing at the same time.To a certain extent,it can explain the current existence of new stocks breaking the market,which is more reasonable than the underpricing rate.