An Empirical Study On The Impact Of Registration System Reform On IPO Pricing Efficiency

IPO pricing efficiency has a great impact on the efficiency of stock market capital allocation.Based on the importance of IPO pricing efficiency,many domestic and foreign scholars have conducted relevant studies on this issue and formed many theories.With the deepening of the research,we found that many differences exist between China and foreign stock market,not only the background,research on the pricing of new shares,have much difference with foreign variable definition also includes the concrete research process,many literature abroad,usually the IPO first-day returns as measure index of IPO underpricing,but,IPO returns on the first day and IPO underpricing are very different in connotation.The first day of IPO return refers to the first day of IPO return,while IPO underpricing,as the name implies,means that the IPO issuer restrains the issuance of shares by offering prices below the intrinsic value of the shares.Obviously,the premise that IPO first-day return is equivalent to IPO underpricing rate is that the trading price of the new shares on the first day is equal to the intrinsic value of the new shares.In the United States,investors in the secondary market are more rational and equate IPO underpricing with IPO first-day returns.But in China,where the firstday price of new shares is often much higher than a company’s intrinsic value,it is no longer reasonable to equate first-day returns with IPO underpricing.Therefore,in the robustness test part of this paper,measure variables of IPO underpricing will be replaced to ensure the rigor of empirical conclusions.In addition,ipo pricing is the key link of registration system,which is an important part of stock market marketization.In the case of the implementation of registration system,higher requirements are put forward for IPO pricing efficiency.Therefore,it is extremely important to examine the impact of registration system reform on IPO pricing efficiency,which can also be used to verify the achievements of China’s stock market registration system reform.Finally,according to the previous studies on IPO pricing efficiency by scholars,this paper takes corporate factors and market factors that affect IPO pricing as control variables.Further,this paper further verifies the specific path of the impact of registration system on IPO pricing efficiency by analyzing the specific measures of registration system reform.Path one holds that the reform of registration system constantly emphasizes the enhancement of information disclosure.We study whether the reform of registration system has a more significant restraining effect on IPO underpricing when the quality of internal information is poor,that is,when the information disclosure is poor.Path two argues that the registration system reform has eliminated the limit on the rise and fall on the first day of IPO,alleviating three negative effects caused by the limit: volatility spillover,price discovery delay and liquidity interference.In this paper,the turnover rate on the first day of IPO is taken as a proxy variable of investor sentiment by referring to literature review.In addition,this paper believes that the reform of registration system reduces investors’ "speculation on new" investment sentiment and is conducive to improving IPO pricing efficiency by removing the restrictions on the rise and fall on the first day of IPO and relaxing the restrictions on margin trading.In 2019,the science and Technology Innovation Board carried out the pilot reform of registration system,and one year after the opening of the science and Technology Innovation Board,the Growth Enterprise Board of China stock market also carried out the reform of registration system.Under this background,this paper mainly studies the empirical study of the reform of registration system on IPO pricing,and the specific path of the hidden influence.This paper conducts an empirical study on the effect of registration system on IPO underpricing,selects the data of listed companies on GEM from October 30,2009 to December 31,2021,and discusses the impact of registration system reform on IPO pricing efficiency by grouping IPO companies whether they adopt registration system or not.