AN EMPIRICAL STUDY ON INFLUENCING FACTORS OF IPO UNDERPRICING

Currently, IPO underpricing is one of the most important issues in the capital market home and abroad. Meanwhile, the degree of IPO underpricing in our capital market is much higher than mature market. Under this background, using a database of the new public companies from January 1st, 2008 to July 31st, 2008 in Shanghai and Shenzhen Stocks Exchange in China, this paper has explored the factors which cause the IPO underpricing. Using the financial data from both the companies and the basic situation of the capital market that day, this paper has set up a linear regression model about the IPO underpricing and examined the relationship between the factors and IPO underpricing. The empirical results reveal that IPO underpricing in China is related to capital market index financial scale, publish price and the first day trading ratio, and has little relationship with circulated stock rate. With empirical conclusions, this paper puts forward some economic explanations and gives some suggestions.