The Study Of The Effects Of The Quality Of Multiple Agency On The IPO Underpricing Of New Ventures

IPO underpricing is common in the process of issuing, which can be found in the markets of all the countries. The researches on this topic have been the focus of scholars and financial companies. They have many research results, which are Asymmetric information theory, Agency theory and the like. However, in so many hypothesis and models of IPO underpricing, although we have certain empirical evidences, we still have no convinced theory accepted by most of people. IPO underpricing is still a mystery for academic circle.For these years, China’s capital market is still at the stage of exploring. The serious IPO underpricing leads to the money flowing to the primary market, which is bad for the allocation of capital. This paper is based on the GEM set up in 2009, which is an emerging market and founded in a murturer background than the Shanghai and Shenzheng stock market. We expect that we can find the reasons and rules of IPO underpricing. Besides, we hope what we study can provide some ideas for the theoretical circle, provide financial operation ideas, provide decision-making reference for regulators and provide investors with relevant suggestions.Based on the 351 companies in GEM from 30 Oct,2009 to 27 Sep,2012, we study the VC, underwriter and CEO’s effects on IPO underpricing through the regression analysis method and the double factor variance analysis. In general, we have some conclusions:(1) VC’s social capital has a significant positive relation with IPO underpricing, which testify that VC has its own short-term perspective and the relationship between VC and underwriter will lead to benefit predilection. (2) Underwriter’s reputation indeed has effects on the underpricing, which are related passively. This may result from the resolution of asymmetric information between IPO companies and external investors. The ruction of information disclosure and certification is working. (3) In the regression equation, we introduce the underwriters’ previous cooperation relationship with the public accounting firms as the social capital to examine the existence of multiple agency relationship influence on IPO underpricing, whose result is significantly positive. Having previously cooperation is more likely giving top priority to the interests of institutional investors, which leads to the inclined interests. (4) As for the variables of CEO characteristics, CEO experience and IPO underpricing are positively related. We find the complexity of the CEOs’backgrounds will have preference of inerest. (5) Finanly, we test the moderator variables and find that under the condition of VC with social capital, underwriter with low reputation and underwriter with social capital, IPO underpricing will be increased with the increasing of CEO experience, which means they have inter-relationship. In the context of pratical use, considering the allocation of persons, organization will help the IPO companies to minimize bad things.