Underwriter’s Role and IPO Underpricing of China’s Security Market

This paper analyses the relationship between the underwriter’s role and underpricing an IPO of China’s stock market based on the four phases of 1332 IPO samples from 1989 to 2005. The result is that underwriter’s role really influenced the underpricing an IPO of China in the person of lower underpricing an IPO for the state-owned large enterprises equities underwritten by large underwriters, underwriters' capacity and reputation affecting the Quiet period, the drumbeating for IPOs issue of the underwriter and its consultation institution efficiently impacting the underpricing an IPO and higher underpricing an IPO for the equities underwritten by mall underwriters through rent-seeking at the first stage of the market development.