A Study On The Impact Of Earnings Management And IPO Underpricing On The Long-term Performance Of Listed Companies

The launch of GEM(growth enterprise market)in China on October 30,2009 solved the problem of financing for small and medium-sized enterprises.However,compared with the main board market the IPO under-pricing rate of GEM market is higher than that of the main board market,which has aroused extensive concern.One of the conditions for an initial public offering is "continuous earnings for the last three years," and some companies that do not meet the legal requirements but want to raise funds will whitewash their financial statements before the IPO.I.e.,to enter the market reluctantly or fraudulently through earnings management,coupled with the blind pursuit of investors,have led to a high under-pricing of shares on the first day of the company's listing and a long-term weakness in new shares after the listing.Therefore,the problems of earnings management,IPO under-pricing and long-term performance are worthy of further discussion.Based on the above-mentioned background and phenomenon,this paper selects the company listed after the board of the GEM as the research object,collects.processes and analyzes the data,and starts the research from the following three plates:First,to explore the effect of earnings management on IPO under-pricing of GEM listed companies;Second,to explore the impact of earnings management on the long-term performance of listed companies on the GEM;Third,to explore the impact of IPO under-pricing on the long-term performance of listed companies.The research shows that there is a positive correlation between positive earnings management the year before the initial public offering and the IPO under-pricing rate,that is,the larger the positive earnings management the year before the initial public offering,the greater the IPO under-pricing rate;the negative correlation between the negative earnings management the year before the initial public offering and the IPO under-pricing rate,that is,the larger the negative earnings management the year before the initial public offering,the smaller the IPO under-pricing rate,but the former is more relevant.The earnings management the year before the initial public offering of GEM listed companies is negatively correlated with the performance of IPO in the following year,that is,the greater the degree of earnings management the year before the initial public offering,the worse the performance of IPO in the following year;There is a negative correlation between earnings management the year before the initial public offering and enterprise performance in the second year after IPO,that is,the greater the degree of earnings management the year before the initial public offering,the worse the performance of enterprises in the second year after IPO;The IPO under-pricing rate of GEM listed companies is positively correlated with the performance of IPO in the following year,that is,the higher the IPO under-pricing rate,the better the enterprises' performance of IPO in the following year;The IPO under-pricing rate of GEM listed companies has a positive correlation with the performance of IPO in the second year after IPO,that is,the higher the IPO under-pricing rate,the better the corporate performance in the second year after IPOIn the end,the paper puts forward some suggestions or suggestions on the higher IPO under-pricing rate of the listed companies and the long-term weak issues of the new shares,so as to make the development of the GEM in China become more and more healthy,and the development of the listed companies is becoming more and more good.