Empirical Research Companies Listed On GEM IPO Effect

From2000, the State Council agreed to the SFC called the second board market theGrowth Enterprise Market (GEM), a decade sword，carries GEM title of "China’s Nasdaq”official debut at the end of October2009. GEM’ opening bells are still ringing in the ears,and also IPO’vividly scene fiercely sought by the market:28IPOs’day turnover more than85%.Compare with the issue price,the closing price of the average increase of106%, andthe average price-earnings ratio of111times. After three years, the companies listed onGEM has been expanded to355, nearly6-fold increase in the total market capitalization.However, the quantitative expansion has not brought a qualitative leap,China’s capitalmarket frenzy GEM had receded, and the GEM index from1239.6highs hit in December2010then down to the current level of713.86points (December201231,2009). The pastthree years, the problems exposed in the development of the companies listed on GEM, aswell as the source of these problems is well worth considering.The paper firstly finishing scholars’ theoretical explanation and empirical research onthe effects of IPO, and then analyzes the development status of Chinese companies listedon GEM IPO, and on this basis, the companies listed on GEM IPO effect test, build themodel of regression on influencing factors of the IPO to empirical research. The resultsshowed that: China’s GEM’ IPO effect does not exist in the short-term solvency and thelong-term solvency, however it exist in terms of profitability, shareholder profitability, cashflow, ability, operation ability, development ability. Its influencing factors were analyzed:the nature of the controlling shareholder equity incentives, the proportion of independentdirectors, the stake of the largest shareholder and so will have a significant impact on theGEM listed companies’ IPO effects. Finally, from the point of view of corporategovernance and regulatory mechanisms put forward several suggestions, hoping to help thedevelopment of China’s GEM listed companies.Compared with the research status at home and abroad, the innovation of this paper ismainly reflected in the following three aspects:①This article use GEM listed companies’Comprehensive financial indicators as the research object, not only has profound practicalsignificance, and also fill the vacancy of the previous studies;②this article from theventure capital investment perspective consider IPO effect and also provide a novelperspective to the effect of GEM listed companies’ IPO research areas;③Using theWilcoxon test, linear regression model on empirical study of companies listed on GEMIPO effect, draw more scientific and reasonable conclusions..