An Empirical Study Of The Impact Of Executive’s Leaving On Company In GEM

Under the demand of the rapid development of economy, Chinese GEM opened up officially in October in the year of2009. After more than three years’ sturdy growing, there are355listed Corporation (as of December31,2012) in the GEM, which has begun to take shape. GEM is not inferior to the lower market of the main board market and also not specifically for the motherboard market’s listing Corporation’s "springboard" market, it has a parallel market financing function as any other market. Thirty years of reform and opening up, China’s economy has made a spurt of progress, taking the position of the world’s second largest economy and in the process of China’s economic development, Chinese private enterprises have made an indelible contribution. However, private enterprises have their own development bottleneck-financing difficulties. The establishment of GEM meets parts of small but fast development of the small and medium-sized enterprises’financing demand, which takes a strong support for the sustainable development of China’s economy.However, a series of problems came into being along with the rapid development of the GEM market at the same time. Among them, executive turnover tide phenomenon is dispersed in the market on the haze. According to the Shenzhen stock exchange announcement, as of December31,2012, the GEM executives quit announcement has reached434, and it is less than50in the year of2010. Does it take influence to the GEM companies of the executives leaving tide in GEM? How much impact it is? This paper is to study that problem.Selecting the year of2010to2011as the sample interval and using the event study method, this paper mainly uses empirical method to study the influence of GEM Executives quit to the company. Through making the econometric model based on the stock price of the company with Executives leaving, this paper studies the law of companies stock changing under different classification of samples and obtains following conclusions:1. only a small part of the firms under certain condition have a significant impact after executives leaving, while a large part of the company, executives to leave is a normal phenomenon of the personnel moving.2. Executive turnover has important influence on the company’s share price under certain conditions in a small part of the company. This paper is divided into five parts. The first part is the introduction. It is mainly to explain the significance of this research and research ideas and research methods and the present research stage in foreign and domestic of the GEM executives quit and the innovation of this paper. The second part is mainly to analyze the related theory of the GEM executives quit. In the theoretical analysis, the incentive mechanism of enterprises and related theory is introduced, then, followed by analysis of the motive and affect of the GEM executives quit, finally it leads to the phenomenon of GEM executives quit tide. The third part is the study on design method. First, the study makes a hypothesis, and then it introduces the event study method amply, finally, this paper establishes the last step of the study. The fourth part is the process of the empirical analysis. This part is the main part of this paper, fist, it makes a preliminary conclusion of the affect to company of the GEM executives quit based on the descriptive statistical analysis, and then uses the significant T test to check the analysis of empirical conclusions, finally measures the degree of the affect to company of the GEM executives quit through check how much the company’s stock price change before and after the executive turnover. The fifth part is to draw the conclusion and take forward policy suggestions for the future and provide a basis for the formulation of appropriate market development policy according to the results of empirical analysis.This paper takes the latest and most complete data about the GEM executive turnover to make an empirical analysis and has a conclusion that it did not have a significant impact on the companies and most of that is a normal flow of personnel in the company, which is the highlight of this paper. However, this paper did not make executives holding shares leave as a separate part of this study due to time and limited resources. Compared with executives fixed pay, executives holding shares can arouse the company stock price volatility through taking different activities, therefore, it makes a large impact on company for executives holding shares leave. If future study can focus on the executives holding shares leave, more in-depth law of the influence on the company be found, which not only can enhance the GEM healthy development but also can provide theoretical an practical experience for corporate governance.