Background Characteristics of Board Secretary and IPO Underpricing

Abstract

The information asymmetry between the internal environment and external environment of enterprises composes one of essential factors leading to IPO underpricing. According to upper echelon theory, background characteristics of senior executives will exert an impact on their behaviors selections as well as the performance of company. The board secretary in China, as the information publisher, can also influence IPO underpricing with his/her personal background. Testing the samples of GEM (The Growth Enterprise Market) in China from the year of 2009 to 2012, the paper concluded that the board secretary with financial background and related working experience can reduce the IPO underpricing, based on which the conclusion has been drawn that the personal background characteristics can influence IPO underpricing and further affect the IPO pricing efficiency, hoping to provide reference for enterprises to recruit the right person for board secretary.