Financing And Investment Efficiency Of IPO Companies Listed On GEM Super Raise

The GEM was launched in Capital Market of China in October30,2009.The high earnings multiples,high issue price,highOver-funding phenomenonis particularly prominent, which causes a lot of hot topics. Experts and scholars athome have given attentions to these problems. Whether the huge over raised-fundscome from The GEM on the IPO can get effective utilization,optimize the allocationof resources or not, it will become essential to steady and sound development ofenterprise. However, when the enterprises raise huge amounts of over-funding, thelack of investment opportunities and investment projects.Executives are lack of theabilities to control capital and they often pursue to maximize their own interests,theyare generally risk-averse, a large number of funds will be telegraphed, limitedresources can’t be optimal deployed, resulting in under-investment phenomenon. Atthe same time, the funds may also be abusing by enterprises, resulting inexcessive investment. Both the under-investment and over-investment will causethe low efficiency of investment, corporate investment performances will beinfluenced, the interests of enterprises and investors will be damaged.This study uses a total of467samples from278IPO listed companies on GEMfrom2009to2011as the research object.Review the related literatures at home andabroad, as defined in the over-financing, the concepts of non-efficiency ofinvestment theory and literature,analysis the present situation of the use ofraised financing in GEM, a combination of qualitative and quantitative analysis.Analysis relys on the free cash flow hypothesis, principal-agent theory, asymmetricinformation theory and corporate governance theory. Draw lessons from theexpected investment model of Richardson, estimated the moderate investment andnon-expected investment level, so as to establish a relationship model, an empiricalanalysis of the relationship between the over-financing and non-efficiency ofinvestment,Investment performance, then get out the empirical results, and putsforward a series of suggestions.The empirical results from this research have verified the proposed hypothesisand proved that ineffectiveness of investment exists in the listed companies. Positivecorrelation exists between over-raised funds and insufficient investment whilenegative correlation exists between over-raised funds and investment behavior.Finally, according to the empirical results, put forward a series of policyrecommendations. In order to improve the governance of over-raised phenomenon inII GEM market, improve the efficiency of using funds, to help enhancethe performance of investment.