Fintech,Information Asymmetry And IPO Underpricing

After the registration system reform,China’s stock market has entered a new stage of market-based inquiry,and the pricing in the primary market is more determined by the market.Along with the development of financial technology,the efficiency and transparency of information transmission in the capital market have been greatly improved,can this alleviate the IPO price suppression caused by information asymmetry to a certain extent?This paper attempts to answer this question along the lines of "theoretical mechanism analysis-mediation effect test".From the perspective of information asymmetry,the mechanism by which fintech affects IPO price suppression is clarified from the perspective of liquidity compensation and credit resources.On the one hand,the development of fintech facilitates the digital transformation of enterprises,improves their information disclosure and financial status,gives them better liquidity in the secondary market,and transmits them to the primary market,effectively reducing investors’ demand for liquidity compensation and alleviating IPO price suppression;on the other hand,the bank-enterprise relationship in fintech-developed regions is closer,and enterprises’ lending behavior in the banking system transmits beneficial information to the capital market,reducing IPO price suppression in the primary market.On the other hand,the bank-enterprise relationship is closer in regions with advanced financial technology,and the lending behavior of enterprises in the banking system transmits useful information to the capital market,reducing information asymmetry in the primary market,so that the IPO price suppression of enterprises with bank backing is lower.This paper collects the IPO data of 605 companies listed on the Science and Technology Innovation Board and the Growth Enterprise Market after the reform of the registration system for empirical testing.The benchmark regression results show that the more developed the financial technology is,the lower the degree of IPO underpricing is.After changing the calculation method of IPO underpricing,it is still stable.In order to eliminate endogenous problems,we select Internet penetration rate as an instrumental variable,and find that the conclusion is still valid.Further,the intermediary effect model is used to verify the mechanism of financial technology affecting IPO underpricing.The regression shows that financial technology can alleviate the problem of IPO underpricing by enhancing the liquidity of stocks in the secondary market and enriching the credit resources of enterprises.Finally,in order to explain the influence of financial technology on the heterogeneity of IPO underpricing,the enterprise attribute is included in the model,and the regression finds that IPO underpricing of enterprises with higher financing constraints is more sensitive to the development of financial technology.Compared with state-owned enterprises,IPO underpricing of private enterprises has a greater impact on the improvement brought about by the development of financial technology is more sensitive,and the IPO underpricing of companies with a higher executive shareholding ratio is more sensitive to financial technology.Overall,this paper investigates the impact of fintech on IPO price suppression by combining theoretical arguments and empirical tests.On the one hand,it explains the theoretical mechanism of fintech’s role in IPO price suppression,on the other hand,it verifies this logical mechanism with empirical evidence,and finally puts forward reasonable policy recommendations.This paper extends the study of fintech to primary market for the first time,which is a certain theoretical innovation.In addition,it has more important policy value for further improving the rational pricing of China’s capital market.