IPO Over-financing, Venture Capital Institution And Over-investment Behavior Of SMEs

In recent years, IPO Over-financing phenomenon is very heavy in the Chinext market andSME Board, SMEs raised huge cash flow through the IPO financing, and this serious IPOOver-financing phenomenon caused the wide attention of scholars. Some scholars begin todiscuss the IPO Over-financing phenomenon, there are also few studies began to concern therelationship between IPO Over-financing and investment behavior based on the sensitivity ofinvestment and cash flow. At the same time, since the GEM Board opening, the venture capitalinstitutions develop fast. The prosperity of SME board and the GEM market provides a good exitchannels for venture capital institutions. The most listing of small and medium-sized enterpriseswhich successfully listed are supported by the venture capital institutions, the study on howventure capital institutions participate in the corporate governance of SMEs began to appear.However, from the present study, no scholars have study how the VC and IPO Over-financinginfluence Over-investment Behavior in one framework. Therefore, this paper put the IPOOver-financing phenomenon and venture investment institutions of small and medium-sizedenterprises together, and to study their effect on the over investment behavior of small andmedium-sized enterprise.This paper selects2009~2010gem and SMEs listing Corporation as the research object,study their investment behavior after listed one to three years. This paper measure theover-investment of every sample during the study period observation by modified model, thenstudy the sensitivity of Over-investment Behavior and IPO Over-financing and whether thepresence of venture capital institutions can curb the existence of Over-investment Behavior.Through multiple linear regression, over-investment, find that IPO Over-financing cash flowpositive can promote the occurring of Over-investment Behavior, however the influence ofVenture Capital Institution is not notable.Conclusions of this paper support the sensitivity between the cash flow and investment tosome extent. IPO Over-financing does promote over-investment behavior of enterprises,resulting in imbalance of the allocation of resources in capital market. However, curbing ofventure capital institutions to over-investment is limited, It is to be verified that the effect ofventure capital institutions on improving corporate governance. In this paper, starting from thecurrent status, study the effects of IPO over-financing and venture capital institutions on overover-investment behavior, broadening the scope of the study of over-investment. It can provide areference for improving the allocation of resources in capital markets. It also can help to improvestock issuing system and regulate the behavior of venture capital institution.