A Study On The Reputation Of Sponsor Representative And IPO

The revolution China's stock issuance system has experienced a transition from examination and approval system to approval system.Currently,it is in the transition period to the registration system.In this stage,market systems have been gradually improved and developed healthily.At the same time,the degree of marketization increased drastically.In this context,the role which government used to play in the process of IPO market weakened.Accordingly,sponsoring agencies will play an increasingly important role.There has been a series of literature studying on the relationship of underwriters5 reputation and IPO companies,which have already affirmed that an excellent reputation of the security underwriter can have a positive influence on the IPO companies.There are not so much studies on the reputation of sponsor representatives.In the process of company's issuance and listing,the sponsor representative assumes the responsibility of recommending and guiding the company's listing,and has the responsibility to keep supervising the company after listed.It is the sponsor representatives who play a core role in the company's listing process.This article will focus on the sponsor representatives' reputation and study its impact on IPO companies.This paper takes the 2004-2016 China A-share listed company as the research object,and examines the impact of the reputation of sponsor representatives on the earnings quality,long-term accounting performance and market performance,and underwriting fee.The study found that:Firstly,When the reputation of the sponsor representative is damaged,the IPO company's post listing earnings quality is poor.That means the higher earnings management level.Secondly,the poor reputation of the sponsor representative is,the worse of the IPO company's long-term accounting performance and market performance after listing.Last,because the sponsor representative with higher reputation can provide better service,they tend to charge higher underwriting fee as compensation.Accordingly,the representative with worse reputation tend to charge lower underwriting fee.