The Comparative Research On Influence Factors Of IPO Underpricing In China GEM Under The Perspective Of Industry

The phenomenon of IPO first-day closing price higher than the issue price is known as IPO underpricing. In general, emerging capital markets IPO underpricing will be greater than mature capital market IPO underpricing. Underpricing magnitude in GEM is not only much higher than in developed countries, but also a lot higher than the emerging economies. With the increasing expansion pressure in the GEM market, the level of underpricing has reduced even apper the phenomenon of break on the first day, underpricing showing the trend from high to low. Underpricing volatility presents a certain industry characteristics. The volatility in manufacturing is significantly higher than non-manufacturing, and break new shares are mostly concentrated in the manufacturing sector. Therefore, it is necessary to analyze the factors of IPO underpricing in GEM through industry perspective, fiding the industry factors which impact at the IPO underpricing on GEM.The phenomenon of IPO underpricing is widespread in the countries capital markets, Domestic and foreign scholars have lots of research on IPO underpricing phenomenon.The ways of scholsrs studing on IPO underpricing are theoretical and empirical. In this paper, on the basis of existing literature and industry perspective I select listed stocks from November2009to November2012on GEM as samples for the factor analysis and multiple linear regression analysis respectively on the industry of manufacturing and non-manufacturing. The results shows that the indexes which impact on IPO underpricing on manufacturing and non-manufacturing can be summarized as the factor of size of equity, the factor of funds promoting, the factor of asset growth, factor of investor motion, the factor of profit and the factor of R&D.Investor emotion and promotion of funds are common factors affecting the manufacturing and non-manufacturing IPO underpricing. Industry differences reflect on that the R&D investment and capital size are more affect the IPO underpricing on manufacturing. However, changes in asset is more outstanding affect the IPO underpricing on the industry on non-manufacturing Asymmetric information theory has weak ability to explain the phenomenon of IPO underpricing, but has improved, and has the industry characteristics. Related to behavioral finance theory can explain the common factor of IPO underpricing in manufacturing and non-manufacturing. Finally, in this paper, I put forward suggestions and improvement measures on strengthening regulatory supervision, strengthening information disclosure system according to industry characteristics and enterprises selects the way of financing flexibly according to the market condition. Which are based on empirical results and IPO reform relevant policy.These suggestions has certain reference on containing the IPO underpricing.