Top Management Team’s Human Capital Characteristics And The Performance Of GEM Companies

October30,2009, the first batch of28companies listed in GEM, opened the prelude of the GEM in China. There are281companies by December31,2011in GEM. GEM provide important capital market platform for SMEs, especially high-tech SMEs.Most of the companies listed in GEM are small, high-growth and high-risk, the strategic choices and investment decisions will greatly affect the future development of the company. The top management team has great decision-making power and determines the development of the companies. Combined with previous lecture and our actual, this paper argues that the top management team of the companies listed in GEM including CEO, vice CEO, Secretary of the Board, CFO, Production director and other top managers who can participate in the company’s major business decision.Human capital plays an important role in economic growth and corporate performance. Top managers influence companies’performance by affecting strategic decisions, their preferences, cognitive basis, values and management perception have an important influence of complex decision-making, however, preferences, cognitive basis and values are difficult to measure. So this paper introduces the demographic point of view, takes age, education, occupational background heterogeneity, political background, tenure duration and team size to measure top management team’s human capital characteristics in order to explore the relationship between top management team’s human capital characteristics and the performance of GEM companies.Generally, we measure corporate performance with book value and market value and specific measurable methods usually include single indicator and multiple indicator approach. There is not a recognized evaluation system of the GEM companies’performance, although some researchers have proposed EVA, fuzzy evaluation method as evaluation method of the GEM companies’ performance in the previous studies, these are not representative. So this paper combined with the GEM companies’actual situation, takes financial indicators to measure the performance of the GEM companies. One condition of GEM companies IPO is that the issuer should prominent main business, and stressed that the GEM companies should disclose the company’s profitability and prospects of development, therefore, this paper mainly measures profitability and growth of the GEM companies. Specifically, selected operating margin that affect the profitability of company’s main business, ROE which is the core indicators reflect the company’s profitability, revenue growth that evaluate company’s business development capacity based on book value, P/E that evaluate company’s future development capacity based on market value.The structure of this paper is that:First, summary the early research on top managers and find that the early researches mostly focus on main board market and SME board, lack of deep study of GEM, so this paper studies on GEM companies. Second, analyze theoretically of the relationship between top management team’s human capital characteristics and the performance of the GEM companies. Based on human capital theory, upper echelon theory and corporate performance theory, analyze of the impact mechanism of top management team’s human capital characteristics and the performance of the GEM companies. Third, according to the theory of corporate performance, combined with the characteristics of GEM companies, choose the performance evaluation indexes of the GEM companies to build empirical test models and discuss the empirical results and put forward suggestions of the GEM companies’ top management team building, as well as descript of the limitations of this paper and the outlook for future research.The samples are selected of companies listed on the GEM from2009to2011. According the needs of this study, we deleted the missing values and data anomalies and469samples are obtained. The data come from the data base of CSMAR and websites.By empirical analysis, we can conclusion that the smaller average age, the higher education level and the larger team size, the stronger GEM companies’ profitability; the smaller average age, the higher education and the higher occupational background heterogeneity, the stronger GEM companies’ development capability based on book value; the higher education level, have political background, the stronger GEM companies’ development ability based on market value.The main innovations of this paper are the following:firstly, the previous researches of the relationship between the top management team’s human capital characteristics and company performance are focused on main board and SME board, lack of deep study of GEM. This paper takes GEM companies as sample, provides empirical evidence of the relationship between top management team’s human capital characteristics and performance of the GEM companies, to make up for the previous literatures less attended the GEM companies and provides some reference value to the GEM companies’top management team building and the development of GEM.