Study Of Relationship Between Top Management Team Heterogeneity And IPO Discount

With the rapid development of market economy, since Shenzhen GEM board opened, the GEM company’s market performance has been the focus of many studies, and the business market performance is well represented by the IPO discount. The importance of the initial public offering to raise capital GEM companies on enterprise development is self-evident, effective control of IPO discount, reduction of capital loss is an important issue that every company need to focus on. Meanwhile, the higher-order theory is that the senior management team will affect performance, especially for start-up companies, TMT is the key to survive and develop for company. Signal theory is that the quality characteristics of the senior management team is an important signal to convey to the enterprise market and investors, thus affecting the IPO discount. Therefore this study focused on the relationship between TMT heterogeneity and IPO underpricing.From the top management team heterogeneity and firm market performance perspective, on the basis of previous research results,like high-order theory and signal theory,this paper studied the effect of top management team heterogeneity on GEM’s business performance, namely, IPO discount. Started by selecting the eight variables that former generally believed have a greater impact on the IPO discount, and then screened four variables that have a significant impact on the IPO underpricing by stepwise regression. Secondly, TMT heterogeneity of tenure, TMT heterogeneity of ducation, TMT heterogeneity of age and heterogeneity of function were introduced into the multiple regression model, and then study their respective direction influence on the IPO underpricing. Finally, the TMT holdings accounted for as an adjustment variables into the model to study the moderating effect of TMT shares accounted for IPO discount and the relationship between the IPO discount and the heterogeneity.The results showed that the age and functional heterogeneity of TMT heterogeneity reduce the degree of IPO discount which will help improve the performance of the enterprise market. Instead, TMT heterogeneity of education levels will increase the level of IPO discount, and no significant effect for the term heterogeneity on the IPO discount. Meanwhile, researchers found that the proportion of ownership significantly reduce IPO discount level and enhance the positive impact of functional heterogeneity on IPO underpricing. Finally the paper gave some recommendations about enterprises TMT organizations constitution which in accordance with empirical findings.