| Summary: | This dissertation provides an empirical analysis on the mispricing of initial public offerings (IPOs) in Chinese stock market and seeks for the factors which leading to the mispricing. A sample of 1130 Chinese IPOs data during the period from 2006 to 2012 are selected including 996 underpriced new shares and 134 overpriced new issues. The total dataset also will be divided into two groups: IPOs underpricing and overpricing, then finding the differences between these two groups.
Based on previous studies and Chinese unique characteristics, signalling theory, winner’s curse theory, ex-ante uncertainty theory and speculate bubble theory as well as informational cascades theory can explain IPOs mispricing in Chinese stock market. Market value of IPO firm and the turnover rate have significant relationships with IPOs underpricing and overpricing respectively. It is indicated that turnover rate is positively related to the underpricing but negatively related to the overpricing. Subscription levels, IPO size and the reformations in 2009 have effects on the underpricing but they are insignificantly related to the overpricing. Underwriter reputation, time interval, and industry sectors seem to be irrelevant with IPOs mispricing.
Keywords: Initial Public Offerings (IPOs), Mispricing, Chinese Stock Market
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