| IPO underpricing phenomenon in capital markets occurred widely all over the world,which is inconsistent with the efficient market hypothesis,if the market is efficient and there is no additional positive information between the issue date and the first-day of listing,IPO excess returns should never appear.There are five major hypotheses explaining the effect of venture investment on the IPO underpricing rate,namely the certification hypothesis,supervision hypothesis,adverse selection,market power hypothesis,grandstanding hypothesis.Certification hypothesis,supervision hypothesis,market power hypothesis were validated extensively in the capital markets of the United States and other developed countries,the grandstanding hypothesis and adverse selection hypothesis were more convincing in capital markets of the developing countries.Since China's private equity investment market is not mature,the theory mentioned above in our country is established to verify.This paper selects 251 companies as a sample.By collecting and sorting out related information of shareholders from the 251 prospectuses,we set the IPO underpricing rate as explained variable.Besides,we set whether private equity investment is one of the shareholders as dummy variable,the lottery rate and the number of private equity investment shareholders as explanatory variables.We came to several conclusions.Descriptive statistics show that the coefficient between private equity investment and IPO underpricing rate has a positive correlation.By analyzing regression model,we found that the coefficient between private equity investment and IPO underpricing rate has a positive correlation,however the coefficient between the lottery rate of private equity investment and IPO underpricing rate has a negative correlation.While the coefficient between the number of private equity investment shareholders and IPO underpricing rate is not significant.So we came to a conclusion that grandstanding hypothesis could be confirmed to some extent.In the last part,we made several policy suggestions,including setting up effective private equity investment system and institution,building strict risk management system.The analysis on how private equity investment effect IPO underpricing in ChiNext not only helps to further improve the capital market system and instittution,but also brings progression to the private equity investment industry. |
