Accounting Conservatism And Underpricing In Corporate Bond Market

Securities underpricing refers to the phenomenon that the trading price of securities in the secondary market is much higher than the issuing price,and the underpricing often leads to a large increase in the price of securities after listing.At present,the research on the pricing of securities issuance is mainly concentrated in the stock market,but there is little research on the corporate bond market as an important financing channel.The research of foreign scholars shows that there is a significant underpricing phenomenon in both Swiss and American corporate bond markets.Similarly,some Chinese scholars take the listed corporate bonds of Shanghai Stock Exchange and Shenzhen Stock Exchange as samples.The empirical results show that there are obvious underpricing phenomena in Chinese corporate bond market,but the degree of underpricing is smaller than that in A-share market.For the reasons of underpricing in the corporate bond market,a large number of literature studies have shown that it is mainly caused by asymmetric information.There are two main opposite explanations:The information theory holds that the smaller the risk of information asymmetry in the bond issuing enterprises,the smaller the underpricing of the bond issue,the greater the information risk and the greater the underpricing.However,signal theory holds that enterprises with low information risk will have a higher underpricing level in order to distinguish them from those with higher information risk.When studying the relationship between underpricing and accounting conservatism in the corporate bond market,American scholars find that the signaling theory can better explain the underpricing phenomenon in the corporate bond market,that is,the underpricing of corporate bond issuance is positively related to accounting conservatism.This paper selects the corporate bonds listed on the Shanghai Stock Exchange from 2014-2016 as a sample.The degree of underpricing is measured by the initial average rate of return adjusted by the market 180 days after the issuance of bonds,and the accounting conservatism is measured by the negative cumulative accrual method.Inaddition,eight control variables which may influence the underpricing of corporate bond issuance are selected,and a regression analysis model is established.Regression results prove that information theory holds,accounting conservatism and corporate bond underpricing are significantly negative correlation.This paper also explains the reasons for the difference between Chinese and American corporate bond markets.