Effect Of Transparency Of Accounting Information On The Information Superiority Of Reducing The Of The GEM Executives

Agreed by the State Council, Securities Regulatory Commission has approved the set-up of GEM in Shenzhen Stock Exchange and the opening ceremony was held on October23,2009. GEM (Growth Enterprise Market) which is inferior to Main Board Market in the capital market is a second board market. The purpose of establishing GEM is especially to provide a reliable financing way for high-growth innovative technological enterprises. After the set-up of nearly four years, GEM has become an effective way for jointing small and medium-sized companies with the capital market. According to the statistics of the Shenzhen Stock Exchange,355companies have been listed on GEM and the total value has reached to1,509,197,853,000yuan. This has not only widened the channels for direct financing and broken the enterprises’ capital predicament, which is conducive to expanding the production scale and making enterprises become bigger and stronger; it also helps some enterprises seize the historical opportunity and take advantage of capital to realize acquisition and reorganization, thus to achieve a new leap.When we give full affirmation to the success of GEM, we should also recognize the new problems that GEM is facing. Such as "three high" problem, change the use of funds, executives and the original shareholders to reduce holding-shares. Much attention has been paid to the behavior of reducing holding-shares conducted by Directors, supervisors, senior management personnel and related personnel of GEM listed companies, because this behavior will probably deliver a message which is inconsistent with financial statements to market, leading to different interpretations for market, which can directly affect the investment decisions of investors. At the same time, the gem executives to gain excess earnings tend to use the advantage of information to carry out the reduction, infringe the interests of investors. So theextinction gem executive information advantage helps relieve or even avoid the occurrence of this phenomenon, the maintenance of gem fair. To improve the transparency of accounting information can reduce the information asymmetry between managers and owners, so the expected information transparency can weaken the executive relative to ordinary investors information advantage, Transparency of accounting information can affect senior executives’s information advantage over ordinary investors, which will ultimately influence executives’s decisions and behaviors. From this viewpoint, this paper researches senior executives’ behavior of reducing holding-shares, with the aim of providing new proposals for solving this problem.Main content and framework of this paper is as follows: the first part is introduction which summarizes the research background and research significance and also reviews the current research status at home and abroad, expounds the research methodology. The second part is about relevant concept definition and theory introduction. Firstly, this paper distinguishes the scope of senior executives. In this paper, senior executives including directors and supervisors are in the broad sense, based on which this paper defines the range of reducing holding-shares by senior executives and specific meaning of information advantage in this behavior. Secondly, it reviews the development of the concept "information transparency" and gives definition of this concept involved in this paper. Thirdly, this part presents the basic theory of the influence of information transparency on senior executives’s information advantage in reducing holding-shares. The third part analyzes the system background and current situation of reducing holding-shares by GEM senior executives, and also combs the current analysis on accounting information transparency as well as analyzes the mechanism of accounting information transparency’s effect on reducing holding-shares. The fourth part is about empirical test. Sample data about executives’ holding-shares reduction is selected and variable indicators are designed. By building regression model, this research applies SPSS to test implementation validity and robustness test is also conducted. The results of the empirical study shows that information advantage is truly made use of in the process of reducing holding-shares. With detailed classification of the type of information advantage, this study finds out that information transparency is negatively related to some information advantage. The fifth part is conclusion. Suggestions a are put forward about how to standardize the behavior of reducing holding-shares by GEM senior executives and thus to speed up orderly GEM construction. The research direction in the future is also looked into in this part.The research perspective is innovative. The current literature research is mostly about the influence of equity structure, the nature of shareholders and financial indictors on holding-shares reduction, while this paper deeply explores the influence from the perspective of accounting information transparency, which has enriched theoretical study about the affecting factors on executives’holding-shares reduction and the economic consequences of accounting information transparency. The research object is also innovative. Due to the relatively concentrated ownership, existing research mainly focuses on major shareholders’ holding-shares reduction behavior in listed companies, while this research focuses on GEM executives with consideration of the specific circumstance of popular equity incentives and overvalued stock in GEM.