Impacts on IPO Underpricing by the Information Disclosure of Intellectual Property- Empirical Study on SME and ChiNext Board Market of Shenzhen Stock Exchange in China

Abstract

This paper investigated the quality of disclosure among the IPO companies on the Shenzhen SME and ChiNext board market in 2011 through three progressive indices that whether IP information was disclosed, fully disclosed and the amount disclosed. We also empirically researched the relationship between the disclosure of different IP information, the underpricing rate on the first listing day of IPO and the cumulative abnormal return in 20 trading days for the sample of IPO companies by multivariate regression analysis method. The result showed that whether the IP information was disclosed and fully disclosed were significantly negatively correlated with the underpricing rate of IPO, but no correlation with the amount disclosed and cumulative abnormal return in 20 trading days. Therefore, the suggestion for regulators and listed companies to pay attention to standard full disclosure of IP information was presented.