A Study Of Private Equity’s Impact On The Company Value Of The Listed Companies On GEM

In the trend of economic globalization, private equity as a kind of financial innovative product plays an important role in broadening the financing channel and promoting the companies’ value been discovered. By the same time, private equity has provided a channel that is high reward and is playing a key role in the global financial system nowadays. When New Bridge capital invested in shenzhen development bank in2004, China’s first private equity appeared truly. From then on, with the constant improvement of China’s capital market and legal environment, especially the successly set up of the shenzhenn Growth Enterprise Market (GEM) in October2009, private-equity began its rapid development, and this attracted the wide attention of investors, regulators, companies and the scholars.Nowadays, theoretical circles are not yet clear about the effect which Private Equity gives on the economy while their knowledge of the effect main comes from foreign private equity market. But in view of china is in the transition period, imperfection of system and corporate governance and the juvenility private equity institutions and managers, it may make the Chinese market different from the result of foreign research.This paper, by using the principal-agent theory focuses on how the private equity influences the invested companies’ value. As the private equity changes the invested company’s capital structure and ownership structure to indirectly affect the value of the invested company, this article focuses on the relationship between the capital structure, ownership structure and company value in theoretical analysis. In order to research the relationship between private equity and value of the invested company, the research object is divided into two kinds according to the presence of private equity in empirical analysis. In order to study this problem deeper, the research object which has got private equity is divided into two kinds according to the reputation of the private equity. In the end, this paper conclude that private equity does not increase the value of the invested company, but the private equity with high reputation increases the value of the invested company.By the way, the research of this article answers the question of what is relations between private equity and the value of invested companies, and propose the theoretical basis and policy advices that how to develop the private equity sector of China. It has a practical significance for innovation of corporate equity structure, building the capital market system, improving the system for financing and investment, etc.