Research On The Relations Between The Subsequent Use Of IPO Over Financing And Company’s Performance

GEM officially launched in China in2009, followed by the companies listed on GEM IPO process serious over financing phenomenon also caused widespread concern in the securities regulatory department and scholars. Faced with such a huge "windfall", Companies may find it difficult to find out a good investment channel to digest. Therefore, how to use the IPO over financing and whether the subsequent use of IPO over financing reached the optimized allocation of resources has became the focus of academic research.The paper employed397IPO sample data formed from the listed period2009to2010in China’s Shenzhen A-share Market board to test our hypothesis. It investigated the effects of the cumulative subsequent use of IPO over financing after the company listed to the company’s performance. We refer to the exceed literature to divide the investment of IPO over financing into capital investment and non-investment capital. Furthermore, we divide capital investments into R&D investment, equity investment and purchasing cars or houses. Whether do they have positive impact on company’s performance?The empirical result proves that the capital investment of sample companies has a positive impact on company’s performance, while the non-capital investment of sample companies has a negative impact on company’s performance. The capital investment in R&D investment, equity investment and purchasing cars or houses has a positive impact on company’s performance, while building a network of market has no significant relation with company’s performance. As a further test of robustness, We use the Value Creation indicators to instead of the usual indicators of financial accounting to investigate the effects of the cumulative subsequent use which financing raised after the company listed to the company’s performance further.