Investors’ Behavior、IPO Over-financing And IPO Underpricing

After 20 years of development,China’s securities market has obtained the remarkable result,but the IPO underpricing is high for a long time.Unlike foreign capital market,It is far higher than other countries.Many scholars researched IPO underpricing and contributed a series of theories and hypothesises on IPO underpricing,but none of them can obtain consistent approval.In recent years,China’s securities market came into being the “three highs” phenomenon(high IPO pricing,high Over-financing and high PE ratio),and the high IPO underpricing and high Over-financing exist at the same time.China’s IPO anomalies has become another " unsolved mystery" of IPO,it becomes the hot spot of concern and discussion among more and more scholars,investors,news media and the regulatory authorities.Many scholars attempt to combine the foreign theory of IPO underpricing,makes an empirical analysis on China’s IPO,and puts forward some opinions and suggestions,but the empirical study only obtained the related factors affecting IPO underpricing,not to explain the nature reason of the IPO offering superior and high underpricing in our country.By the end of 2015,the average IPO underpricing in China is 113.6%,the highest average underpricing of 641% in 1991,the 21.08% for 2011.Where is the cause of the high IPO underpricing in China? Why the high IPO underpricing and high over-financing in China exist at the same time? What is the influence mechanism between the IPO over-financing and underpricing? In view of these questions,find the cause of high IPO underpricing and high over-financing in China through the theoretical and empirical study,and it will provide reference for enhancing the efficiency of resource allocation in the primary market.Combining the reality of China’s securities market,the paper constructs the IPO over-financing model and the underpricing model and the over-financing-underpricing relation modelb based on the investors’ behavior.And analyzes the IPO underpricing and over-financing which affected by the investors’ behavior,and explains the phenomenon of the high IPO underpricing and high over-financing from the theoretical,empirical and numerical analysis in China.This paper will study from three aspects.In the study of the behavior of institutional investors on IPO over-financing,The results showed that there is a positive relationship between evaluated share value of institutional investors’ behavior and IPO over-financing.This means that the more optimistic the institutional investors expected,the higher over-financing in IPO and the pessimistic expectation of investors may cause the failure of IPO.Compared with the institutional investor risk aversion,risk neutral institutional investors may lead to higher IPO raised.The IPO over-financing is positive correlation with the heterogeneity between institution and retail investors,namely the larger the heterogeneity between institution and retail investors,the larger IPO over-financing.With the premise that other conditions remain unchanged,IPO over-financing of investors’ risk aversion is smaller than that of neutral investors.When the institution investors avoid risk,IPO over-financing is negatively related to the new shares allocation rate of institution investors,the risk aversion coefficient and the degree of risk,but positively related to the amount of institutional investors.In the study of the investors’ behavior on IPO underpricing,The results showed that there is a positive relationship between IPO underpricing and new equity valuation of retail investors.That is to say,the more optimistic of retail investors,the higher the IPO underpricing;the more optimistic of institutional investors,the IPO lower of underpricing instead.In the study of the IPO over-financing on IPO underpricing,The results showed that the IPO over-financing is negatively related to the IPO underpricing,it means that the higher IPO over-financing,the lower IPO underpricing.The IPO over-financing is positively related to the institutional investors’ value evaluation of per share,namely the more optimistic of institutional investors,the higher of IPO over-financing.But the IPO underpricing is opposite.When the institutional and retail investors are overly optimistic,the higher IPO underpricing and IPO over-financing can exist at the same time.Finally,we use the method of numerical analysis and empirical analysis.the numerical analysis and the empirical analysis show that investors’ behavior have agreat influence theIPO over-financing and underpricing in China,and IPO over-financing is negatively related to the IPO underpricing,which provides empirical support for the conclusion.