Listing System And IPO Underpricing,Long-term Performance

The registration-based IPO system is an issuance system commonly adopted by developed capital markets.On June 13,2019,Sci-Tech innovation board,a registration-based pilot,was officially launched,which means that the capital market of China has entered a new historical stage.However,due to the short duration of the pilot,there is still no consensus among the academia on whether the registration system reform can effectively improve the accuracy of new stock pricing and reflect market effectiveness.In the context of the full implementation of the registration system,it is a worthwhile study to analyze how to optimize the registration system and promote the stable and healthy development of the capital market,using the impact of the registration system reform on IPO pricing and the long-term performance as an entry point.This paper takes all 281 A-share listed companies from July 22,2019 to July 22,2020 as the research object,and examines the impact of the registration system reform on IPO pricing and its long-term performance,and further explores the impact of underwriter capacity and equity concentration within the company on IPO pricing under the registration system reform.The study finds that,in terms of short-term characteristics,the reform can reduce IPO underpricing to a certain extent,which leads to significantly lower actual first-day returns and excess returns,and significantly higher relative issuance price-to-book ratios.From the perspective of external factors,underwriter capacity has a significant impact on IPO underpricing.The stronger the ability of underwriters,the lower the IPO underpricing.From the perspective of internal factors,the concentration of corporate equity has a great impact on IPO underpricing.The lower the concentration of corporate equity,the lower the IPO underpricing.In terms of long-term performance,the implementation of the registration system can weaken the negative correlation between IPO underpricing and future long-term market performance.Taken together,the registration system reform has indeed improved the pricing efficiency of the capital market,but it is still necessary to further optimize the roles of government and regulators,enterprises,market participants and other entities in the capital market.This paper provides a new perspective for the study of China’s IPO in the context of issuance system reform and enriches the relevant literature at the level of empirical studies on institutional policies.