IPO Underpricing in Chinese Stock Markets

This paper tests the underpricing of IPOs of A share market based on the research methods developed from the Western empirical studies and combined with the environment of Chinese stock market.It analyzes how the unique Chinese characteristics and the factors that correlated with IPO underpricing in the Western empirical research take effects on the Chinese IPO underpricing. It turns out that the overpricing of secondary market is strongly associated with the excess initial return, which is different from the Western countries essentially.