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Analysis of Factors Affecting the IPO Initial Return

In: Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025)

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  • Shuxuan Yu

    (Chongqing Technology and Business University, School of Economics)

Abstract

IPO is the most commonly used financing method for enterprises in current market and is very attractive to investors. Understanding the underlying reasons for the changes in initial return of IPO is beneficial for investors to make decisions. This paper points out the limitations of existing research through literature review and identifies the factors that determine initial return of IPO. Then this paper explores the factors by constructing a multiple linear regression model on IPO data in the Chinese market from September 2014 to September 2013. It is found that consumer confidence, new investor accounts, and turn of last month have a negative influence on the IPO initial return. Investor sentiment has a positive impact on the initial return of IPO, which to some extent explains the changes in the initial return of IPO. Based on the analysis results, this paper proposes suggestions from the perspectives of government, enterprises and investors to reduce losses in all aspects, promote healthy market operation and economic growth. Finally, this paper reviews the limitations of this study and points out directions for future research.

Suggested Citation

  • Shuxuan Yu, 2025. "Analysis of Factors Affecting the IPO Initial Return," Advances in Economics, Business and Management Research, in: Maizaitulaidawati Md Husin (ed.), Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025), pages 122-131, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-874-5_16
    DOI: 10.2991/978-94-6463-874-5_16
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