An Empirical Research On Ownership Structure Of Chinese GEM And IPO Underpricing

In October 2009, twenty-eight SMEs issued on the Shenzhen Stock Exchange, meaning that the GEM market prepared for ten years launched. GEM is independent of the motherboard market which is also called the second board market. It effectively coordinated with the country’s industrial policy, and helped a number of high-tech companies to enter a period of rapid development. Currently, there has been relatively serious IPO underpricing problems in the GEM operation, which affects the efficiency of the capital’s allocation in secondary market.The previous studies on the GEM IPO underpricing pay most attention on the investor’s behavior in the secondary market. It believes that irrational investor is the main cause of the GEM high underpricing. However,the study from the perspective of equity structure is handful. This paper summarizes the IPO underpricing on the basis of the research results at home and abroad and makes 375 GEM listed companies from October 2009 to April 2014 as samples, trying to analyze what kind of ownership structure makes investors adjust the company’s value upwards by using empirical research methods. The study found that the proportion of the largest shareholder of listed companies on GEM was significantly negatively correlated with IPO underpricing. The proportion of outstanding shares and retained shares were positive negatively correlated with IPO underpricing. The relationship between equity restriction, the proportion of managerial ownership, the proportion of institutional ownership and IPO underpricing is not significant. On this basis, we propose a modest reduction in the proportion of the largest shareholder, to improve the information disclosure system, optimizing the shareholding structure, strengthen the regulatory measures, foster rational investors.