Financial intermediation, underwriter decisions and underwriting risks in China's stock market

The inefficiency of underwriting business in China needs for further researches to found out the risk source of underwriting risks. Based on behavioral economics and financial theories, we put forward hypotheses from personal, information these two aspects and do empirical study on them. The results show that irrational underwriting decisions would be much easily be proposed and generate high underwriting risks under inefficient financial markets and external interference conditions. Especially, different from foreign experiences, the risk compensation mechanism is not efficient in China and dual-shareholder structure is one of the main sources of the underwriting risks.