Study On The Relationship Between The Governance Structure Of Listed Companies On GEM And Business Performance

The first28GEM’s companies successfully listed on the Shenzhen StockExchange, which marked that China’s Growth Enterprise Market was born. GEM is animportant complement to the motherboard market and it occupies an importantposition in the capital market. Generally speaking, GEM companies are set uprecently, small, high-growth, high innovation and high-risk, which is different fromMain Board listed firms. In terms of governance structure, GEM also has itsuniqueness, showing short agent chain, high equity concentration, etc. In this paper,using the empirical analysis method, we study the effects of corporate governance onGEM listed companies from different aspects. All of these are for the purpose ofproviding some empirical data to optimize the corporate governance structure of ourcountry’s GEM listed companies, also, it can provide some investment reference forthe majority of small and medium-sized shareholders.Based on the theory of corporate governance of the incomplete contract theory,principal-agent theory and stakeholder theory, the355GEM companies of2012as theresearch object, using statistical analysis software, we study the relationship betweenthe company governance structure and the business performance from three aspects:the ownership structure, board structure, and management incentive. First of all, wemade the whole analysis to the current situation of the GEM. Secondly, by descriptivestatistical analysis, we have more intuitive understanding of the GEM governancestructure characteristics. Then, through the correlation analysis, we confirmed therelationship between the GEM governance structure and the performance. Finally, bybuilding regression model, we analyzed the relationship between the corporategovernance structure and the business performance. Also, we selected SMEs at thesame time with the industry as compared to samples, and analyzed the differencesbetween the two samples.After all of this is the contrast samples regression analysis.Through the empirical analysis, we find, it is true that there is a certaincorrelation between GEMs governance structure and business performance. Theproportion of the largest shareholder, the ratio of the proportion of the second to thetenth largest shareholders and the largest shareholder and CEO duality all have asignificantly negative correlation with the business performance. The consistency ofindependent directors’ residence with listed companies and management’s salary level both have a significantly positive correlation with the business performance. Andthere is no significant correlation between board size and corporate performance.This paper reveals the influence of different aspects of the governance structureof GEMs on business performance, and it enriched more data to the research of capitalmarket. Simultaneously, this paper has important practical significance for perfectingthe GEMs governance structure and improving corporate performance.