An Empirical Study of IPO Underpricing: Evidence from Small Medium-sized Board in China

摘要

Initial Public Offerings underpricing is a commonplace phenomenon in the stock market of China for ages, especially in small and medium-sized board. This paper examines the factors which influence the degree of IPO underpricing in small and medium-sized board by means of empirical methodology with substitute variables. Furthermore, this paper has proven that some of foreign theories are still valid in the small and medium-sized board in China. The result indicates that the factors which have significant impact on IPO underpricing include probability of lot, issuing size, issuing price-to-earnings ratio and period waiting for listing. Finally, this paper comes to a conclusion that "Popularity Effect hypothesis" and "signal indication" are suitable, while "speculative-bubble hypothesis" and "internal blocking hypothesis" are not suitable in the small and medium-sized board in China.