Executive Management Team, Quality And Ipo Underpricing Relations

IPO under pricing is popularly an existence in all the stock markets of the world. As the stock market of China expanding quickly, under pricing is becoming a hot issue to be researched from different view points, such as pricing mechanism, market structure, fame of security brokers, and so on. However, the IPO Company itself received few attentions in these informed research. My research studied the relationship between IPO underpricing rate of A share market in China and management quality of these IPO companies.Based on the samples of IPO companies in Shenzhen Stock Exchange from 2009.7 to 2010.2, the thesis defines and quantifies the management quality of a company, and then gives an empirical test of the relationship between IPO underpricing rate of A share market in China and management quality of these IPO companies. After that the thesis gives specific analysis of how each factor of management quality reflects the degree of IPO under pricing.The conclusion is that:On Small and Medium-sized Enterprises (SMEs) board, the relation ship between the degrees of IPO underpricing rate and management quality of TMTs is statistically positive. High management quality is a signal of company's real value delivers to investors, which helps reduce the asymmetric information of the IPO Company, and consequently reflects investors'valuation of the company, and then lowers the degree of IPO under pricing. While, on Growth Enterprises Market (GEM), for the excessive speculation and over-regulation, the effect that high management quality as a signal of company's real value is impaired. Management quality and IPO underpricing rate have no significant relationship.