A Study On The Impact Of Underwriters’ Reputation On IPO Underpricing From The Perspective Of Unlocking The First Day Price Limits

The State Council issued the "Opinions on Further Improving the Quality of Listed Companies" on October 9,2020.The "Opinions" proposed to " Comprehensively implement and step by step implement the securities issuance registration system " policy.Sci-Tech Innovation Board has attracted much attention as a pilot board for the implementation of the registration system in my country.The biggest difference from the main board is that it has released the restrictions on the rise and fall of new companies on the first day of listing.At the same time,the reform of the registration system has also promoted the decentralization of the government and the enhancement of the responsibility of the underwriters,so that the reputation of the underwriters will be extremely important in my country’s securities issuance market in the future.Under the new background of the registration system reform,whether the underwriter as an intermediary agency can fulfill its responsibilities,and whether its reputation can affect the high IPO underpricing rate in my country’s capital market has become the focus of investors from all walks of life.Therefore,this paper studies the impact of underwriter reputation on IPO underpricing from the perspective of loosening the first-day price limit.This paper selects the stocks that were listed on the main board and STAR market of my country’s Shanghai Stock Exchange from July 22,2019 to December 31,2021 as research samples to study whether the first-day rise and fall restrictions are lifted for underwriters the impact of changes in the relationship between reputation and IPO underpricing.Empirical research finds that: underwriter reputation has a significant negative correlation with IPO underpricing.However,under the condition of opening the limit on the first day’s rise and fall,the negative relationship between underwriter reputation and IPO underpricing will be severely weakened.In the context of the gradual liberalization of the registration system in my country,this paper discusses the relationship between the reputation of underwriters,the first-day price limit and IPO underpricing,which has extremely important practical significance for promoting the deepening reform of my country’s capital market registration system.