Research On IPO Under-pricing And Its Influencing Factors Of The GEM In China

Studies have shown that the initial public offering under-pricing is widespread in security markets around the world.Being a brand,China's Growth Enterprise Market(GEM)bears a significant IPO under-pricing.The high IPO under-pricing will produce a series of negative effects.For example,excess returns in primary market stimulate speculative investors in the secondary market.And then the stock price will be bid up in the secondary,this will be detrimental to long-term stability of capital markets.We adopt the method of empirical research to analyze the China's GEM IPO under-pricing phenomenon and its influencing factors by comparing the China's GEM with the Main Board and the SME Board.According to the data,we found the underpricing condition is really existed even after the IPO restart.And among all the boards,the GEM's under-pricing phenomenon is at a high level.In order to know the present situation and factors affecting the GEM IPO under-pricing in China,we select the latest market data.Firstly,we put forward the hypothesis from four aspects including the market atmosphere?the company's basic situation? the behavior of investorsand the intermediary institutions,which structures the theory framework.Then from the above four aspects,we choose a total of 10 explanatory variables.Finally we research the IPO under-pricing of GEM using quantitative and step-wise regression methods.In the end,based on the results of empirical analysis,I put forward relevant improvement measures,hoping to provide some reference for listed companies,investors,regulators and intermediaries in the GEM and gradually improve the operation efficiency of capital market.