Family Business Heterogeneity, Media Coverage And IPO Underpricing

The existing studies have found that Social Emotional Wealth(SEW),the family's non-economic goal,is an important factor that influences family business' behavioral decision-making,and often has a long-lasting relationship with Financial Wealth(FW),the economic goal.For example,in the family business IPO process,in spite of the loss of SEW may cause the weakening of family control.But in order to further reduce the probability of company's listing failure and possible legal costs(ie,resulting in greater SEW losses),family business will further reduce issue price and maintain their SEW by sacrificing FW,exhibiting higher IPO Underpricing.However,many studies also show that edia Coverage have an impact on the attention of investors and the reputation of the company,which in turn has a very important influence on the IPO Underpricing.It can be see,that IPO Underpricing is not completely determined by the issue price,and Media Coverage is also an important factor.On the other hand,the Theory of Relational Embeddedness also holds that the close relationship between family members is a special kind of social relationship.When it is embedded in the business management,it will also have an important influence on the decision-making of family business.Therefore,different types of family businesses may have different levels of emphasis on SEW or FW,which may result in different degrees of emphasis on Media Coverage.That is,the use of Media Media Coverage can result in different IPO Underpricing.to maximise their own interests through significant effects on stock price.In view of this,based on the perspective of SEW,the paper mainly study the influence of different family members on family business decision making,and the trade-off between SEW and FW on Close-Family business(couples,fathers and sons)and Loose-Family business(brothers,compound and extended family).It also explore the influence on IPO Underpricing.The study found that:(1)The relationship between different family members has a significant impact on the IPO Underpricing:the IPO Underpricing of Loose-family business is significantly higher than that of Close-Family business.(2)Compared with Close-Family business,Loose-Family business pays more attention to the rise of IPO underpricing through Media Coverage(Media Attention and Media Coverage Tendency)that have a significant impact on stock price volatility and thus obtain short-terrm gains,more FW and more SEW from the perception of company value.However,in the long run,Media Rendering may cause damage to the company's image,and it will not benefit the rise of SEW.It can be seen that Close-Family business pay more attention to the long-term maintenance of SEW.(3)When the family members participate in business management,the behavior of family company focusing on SEW is more prominent,which is manifested in the decrease of the number of media reports before the IPO so as to lead to the reduction of IPO Underpricing.The contribution of this research may be that:Firstly,based on the perspective of Relationship Embeddedness Theory and the family member relationship,the differences in the pursuit of SEW behaviors between different family businesses and the important role of media reporting in the family business are studied so that expand the family business community and the enric SEW research.Secondly,this article uses the balance of SEW and FW of family businesses to analyze IPO Underpricing,further enriching the IPO literature.