The Investment Inefficiency And Improving Strategies Of Listed Companies In Growth Enterprise Market

The company’s investment activity is one of the important activities of an enterprise’s survival, which is an important foundation for the company’s future cash flow increasing, which is directly related to the healthy and sustainable development of enterprises. However, the listed companies suffer the inefficient investment. On the one hand due to the imperfections development of capital market, information transparency is not high, asymmetric information affects the resource allocation efficiency of capital markets. On the other hand, between the creditors and the shareholders, a series of agency problems between managers and shareholders, etc. brought agency costs, making business investment decisions are not always rationalizing. Modern enterprise inefficient investment phenomenon includes: under investment and over investment. Under investment is an enterprise in making investment decisions for some reason abandoned the investment projects net present value above the zero or companies are not looking for investment opportunities actively. Over investment is that some companies invest projects net present value below the zero for some reason, the enterprise’s own funds for the project in the inappropriate behavior. Therefore, the study on the inefficient investment of listed companies has a positive effect to improve the value of listed companies, but also to promote the healthy development of China’s economic prosperity. At present, studies on the inefficient investment of listed companies mostly located in main board market or an industry, research on GEM listed companies inefficient investment is rare. GEM listed companies different with the main board market which the ownership structure and enterprise scale has its own uniqueness. Therefore, study on the GEM listed companies inefficient investment issues is importance.First, the background and significance of the article has done a brief overview, review of existing research status at home and abroad, and summary and commentary from the agency and financial constraints in two ways. Then the factors affecting underinvestment and overinvestment of listed companies were analyzed theoretically, including agency and financial constraints. Finally, based on this theoretical analysis of GEM listed companies empirical test results and analysis, and put forward some suggestions for improvement.