An Empirical Analysis on the Influencing Elements of IPO Underpricing in China: New Evidence from Shanghai and Shenzhen Stock Exchanges 2001-2008

Tong, Qiqi (2010) An Empirical Analysis on the Influencing Elements of IPO Underpricing in China: New Evidence from Shanghai and Shenzhen Stock Exchanges 2001-2008. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

This research provides an empirical analysis of the influencing elements of the IPO underpricing on Shanghai and Shenzhen stock exchanges in China. Applying multiple regression technique through PASW Statistics 18, a database of 491 A-Share IPO firms is randomly selected from 29 November 2001 to 25 September 2008.

Based on previous studies and personal experiences in this area, a linear regression model is set up with 1 dependant variable IPO underpricing return, and 10 independent variables, including market climate, agency costs, issuing P/E ratio, offering system, board committee control, firm tangible human capital, firm intangible human capital, turnover rate, listing location, and related party transactions.

The empirical results reveal that all independent variables are statistically significant. Among them, market climate, issuing P/E ratio, offering system, firm intangible human capital, turnover rate, and related party transactions have positive influences on IPO underpricing return; agency costs, board committee control, firm tangible human capital, and listing location have negative influences on IPO underpricing return.

Particularly, agency costs and firm intangible human capital are the principal elements affecting the IPO underpricing return in China; firm tangible human capital, firm intangible human capital, board committee control and related party transactions are the newly discovered influencing elements of the IPO underpricing return.

With all these results, it not only provides a brand new insight to the IPO underpricing research area regarding its influencing elements of Chinese IPOs with an innovative perspective from people’s future earnings potential, but also generates some useful industrial insights to key IPO players in the financial markets of China.

Key Words: IPO Underpricing, Influencing Elements, Future Earnings Potential, Multiple Regression Analysis, PASW Statistics 18

Item Type: Dissertation (University of Nottingham only)
Keywords: Tong, Q. 2010, MA, Finance and Investment, IPO Underpricing, Influencing Elements, Future Earnings Potential, Multiple Regression Analysis, PASW Statistics 18
Depositing User: EP, Services
Date Deposited: 06 Jul 2010 08:47
Last Modified: 22 Oct 2016 15:45
URI: http://eprints.nottingham.ac.uk/id/eprint/23518

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