Research On Impacts Of The Private Equity On The Growth Of Growing Enterprise

Private equity(PE), introduced in China in 1990s, has become the third largest market after the bank bond financing and stock market financing after 30 years of development. Private equity investment is a kind of Equity financing, dedicated to invest in unlisted high-tech, innovative and small enterprise. Investment generally occurs in before IPO a year to two years, and after enterprise successful listing, private equity investment institutions will take the way of MBO, the secondary market the sale to exit investment to get a big return. Private equity investment not only provides a great convenience for enterprises financing, but also provides some value-added services, such as organization and management, strategic planning, marketing strategy formulation and adjustment which plays a role in promoting the growth and development of an enterprise. Nevertheless, some characteristics of private equity investment, for example, the single objective of private equity investment, exit way, lower professional management level had brought some adverse effects on growth, coupled with China’s private equity market is not mature, imperfect and the lack of rules and regulations. It is controversial that the relation between private equity investment and growth.On the basis of reviewing the previous research results and combining with the relevant theoretical basis, this paper first puts forward the research hypothesis, then the paper selected GEM Listing of 211 companies as sample data, and used descriptive statistical analysis method and least square regression analysis method to verify the hypothesis. The result shows that the growth of enterprise with private equity investment institutions is significantly higher than others, and private equity investment has a positive impact on the company’s growth; the degree of participation of private equity investment institutions has no significant impact on the growth of enterprises.Finally, according to the above research conclusion, the paper proposed some policy implications:from the perspective of small and medium-sized enterprise, introducing actively private equity investment; selecting carefully of private equity investment institutions; from the perspective of private equity investment institutions, paying attention to their own development and to establish a good reputation; diversifying channels of investment, specializing investment industry; improving investment and service level, strengthening investment and service management.