An Empirical Study About The Impact Of The Gem Companies Financing Structure On Firm Value

Firm value is an important concept of financial management, and the goal of financial management is to increase firm value. The company’s financing activities, investment activities and working capital management activities are centered on the value creation. Factors that influence firm value involve many aspects of management, finance and economics. The impact of financing structure on firm value is a focus in academia. The domestic research on the relationship between financing structure and firm value mostly concentrated on the premier board market. GEM is a new market that introduced in2009and research about the impact of the GEM companies financing structure on firm value is insufficient. This paper is based on previous studies, describes the related theory, and examines the impact of the GEM companies financing structure on firm value.Based on reviewing literature, using empirical analysis methods and data from2010to2011of the GEM and Shanghai Composite A share listed companies, this paper studies the performance of the financing structure and the relationship between financing structure and firm value of the GEM companies, and makes a comparison on the research results between the GEM and Shanghai Composite A shares companies. Observing if there is a difference between the results, and analyses the causes of the differences.The results show that:(1)The GEM companies overall debt level is lower, the overall debt level has significant positive correlation with firm value and the Shanghai Composite A shares companies overall debt level has significant negative correlation with firm value. There is significant difference between them.(2) The debt financing structure of GEM companies is not reasonable, short-term debt ratio is high and long-term debt ratio is low. Short-term debt ratio has significant positive correlation with firm value and long-term debt has significant negative correlation with firm value. And there is significant difference between the GEM and Shanghai Composite A shares companies.(3) The ownership structure of GEM companies is relatively concentrated, and the inverted "U" relationship exists between ownership structure and firm value, which is in accordance with the results of Shanghai Composite A shares.Finally, according to the empirical results and in combination with the actual situation of China, this thesis puts forward some relevant policy suggestions to improve the financing structure of GEM companies.