Study Of The Equity Investor For SMEs In China Based On Herding

Because of Emerging stock market’s (GEM) high-risk, high-yield characteristics of eachcountry or region in the world, it has been the hot spot not only on finance theory, also in theinvestor. In recent years, SME board market and Growth Enterprise board market have played aimportant role in SME finance, it can help the development of high-tech industry. However,our investors are unsophisticated in SME board market and Growth Enterprise board market,and has different strategies and regulatory measures from the Main board market investments.The regulatory rules need to be adjusted according to the unique characteristics of this market,which this article would like to find the entry point.First, an overview of herding are summaried to explain the reasons of human society’sherding, as well as China’s capital market herding. This paper wants to sum up the reasons andfind ways to develop solutions to the herding. Followed by the introduction of China’s small andmedium-sized enterprises defined standard, the development of SMEs in recent years, small andmedium-sized enterprises to SME board market and GEM board market’s conditions weresummed up, we find the maturity and market capitalization of companies listed on GEMsignificantly worse in small plates of listed companies, paving the way for the next EmpiricalAnalysis. We use Cointegration analysis, Granger causality test, error correction modelempirical mode to test SME board market and GEM board market are impacted by themotherboard market, and find that the motherboard market lead in SME board market andGEM board market’s volatility. Next, we design an empirical model by integrating of CSADand GARCH model, it is concluded that GEM board market and GEM board market haveherding, but the GEM market’s herding is more significant than SME board market’s herding.The size of herding during share price rise is less than the size during decline. We also get a newconclusion: when SME board market and GEM board market’s herding are large, their pricefluctuations will be smaller.