The impact of Company Profitability and Stock Exchanges on IPO Funds

Abstract

In China, many companies now choose to obtain financing and liquidity through IPO. However, in addition to common factors such as company operations and debt status and shareholder opinions, there are also some unstable factors that will affect the IPO, and even lead to the appearance of IPO underpricing. This paper will discuss the relationship between unstable factors and IPO underpricing that may be encountered in the management of Chinese listed companies. It firstly briefly introduces the independent variable: "instability" which would be listed in detail. Secondly, it contains the IPO underpricing and the formulas and methods to measure it. The data in this paper mainly comes from CSMAR and Wind database and will be dealt with by Excel and R to draw statistical conclusions. Finally, in order to derive the relationship between, linear regression model will be made to test the hypothesis by analyzing the correlation coefficient and P value, that is, the higher the "instability", the easier the IPO underpricing phenomenon will occur. More precisely, figuring out how does the instable factors will influence the IPO underpricing.