A Study Of Private Equity’s Impact On The Company Value Of SME Board Enterprises

In the trend of economic globalization, private equity as a kind of financial innovative product has achieved great success. During the development of global economy, it plays an important role in developing multi-level capital market, broadening the financing channel, promoting hi-tech enterprise development and so on. But in recent years, private equity investment is active in China’s capital market and this innovative financial tool which comes from the United States, also shows vigorous vitality in China.Meanwhile, China’s small and medium-sized enterprises face difficulties in financing, corporate governance, which stop the the enterprise from developing. As an integrated part with SMEs, PE not only widens the financing channels of SMEs, but provides a better solution on corporate governance structure, agency problems and so on. The author had reason to believe that, PE can play a positive impact on the company value of SMEs. Most of the abroad research support that PE can improve the company value because of the certification hypothesis, market power hypothesis and screening and monitor hypothesis. As the SME board which starts on May27th in2004plays an important in the development of SMEs, this paper tries to do a astudy of PE’s impact on the company value of SME board enterprises.In chapter1, a brief introduction of the background,the meaning, the innovation and shortages, the structure of this paper.In chapter2, some basic concepts are given like the concept of company value and PE. Meanwhile, the research of PE’s impact on company value in foreign countries and in China is introduced respectively, including the certification model, adverse selection model and grandstanding model.In chapter3, the development of PE in China is discussed. This chapter includes a brief introduction of PE’s development and present situation in China and an analysis of the features of PE in China. In chapter4, theoretical analysis of PE’s impact on the company value is given. The relation between PE and the investment company, the functional hypothesis and the specific performances are involved.In chapter5, empirical analysis of PE’s impact on the company value of SME board is given. The author takes the measure of single variable analysis and multiple regression to do this research. According to the empirical analysis, PE’s positive impact on company value of SME board enterprises is proved.The last chapter is a conclusion of this dissertation, which gives some suggestions on the development of PE in China.