China’s Monetary Supplement,Institutional Investor Sentiment And IPO Underpricing

The trading volume of China’s securities market has rapidly increased from 18.3 billion in 1994 to 20 trillion in 2020.China’s securities market has made remarkable development in recent 20 years.However,there are many unique anomalies of China’s securities market in the explosive growth process of China’s securities market,the most representative of which is the low breaking of corporate IPO on the first day in China’s securities market.At present,the research on IPO Underpricing has been more common in Chinese academic circles.This paper mainly studies the impact of money supply on IPO Underpricing.At present,this research is relatively few.The research of this paper will help the government and investors further understand the impact mechanism of monetary supplement on IPO Underpricing.Based on behavioral economics and macroeconomics,this paper analyzes and studies the impact of money supply on IPO Underpricing and the impact mechanism of money supply on IPO Underpricing.For the research of this subject,the paper adopts the combination of literature research method and empirical research method for correlation analysis.Firstly,in the literature research part,by reviewing the previous literature on monetary supplement,investor sentiment and IPO underpricing,we can understand the research results of relevant issues and help to improve the accuracy of variable index selection.Secondly,in the empirical part,the monetary supplement in the explained variables selects the monetary issuance(M2)as the proxy index,and the institutional investor sentiment selects the annual average of offline oversubscription multiples as the proxy index.This paper divides the rate of IPO Underpricing in the explanatory variables into short-term IPO Underpricing rate and long-term IPO Underpricing rate,further establishes the relevant assumptions and causal relationship model between monetary supplement,institutional investor sentiment and IPO Underpricing rate,and verifies the assumptions through regression analysis.The research conclusion shows that:1)First,the change of money circulation(M2)will have an impact on both short-term IPO Underpricing rate and long-term IPO Underpricing rate.2)Secondly,the larger the currency issue,it will positively stimulate the sentiment of institutional investors,and then inhibit the short-term IPO Underpricing rate of the period.3)Institutional investor sentiment is not a potential transmission of monetary supplement affecting the IPO Underpricing rate of IPO Guide channel.