Over-financing And Enterprise Investment Efficiency

Growth Enterprise Market has come into being for more than six years since its birth, and the number of listed companies changes from 28 on October 30, 2009 to now nearly 500.The foundation of Growth Enterprise Market is an important step in multi-level capital market system construction. International experience shows that Growth Enterprise Market provides an investment and financing platform for innovative small and medium-sized enterprises and investors who have different risk preference. Growth Enterprise Market helps with establishing and improving the market-oriented innovation mechanism where enterprise is the core, market is the guidance and capital is the link. It also helps high-tech and innovative enterprises which represent the development direction of economy in the future to grow and optimizes economic structure. As an inevitable requirement of practicing Scientific Development Concept, promoting independent innovation, accelerating the transformation from science and technology to productive forces, the foundation of Growth Enterprise Market makes an important contribution to economic and social development.But we must realize that the growing process of Growth Enterprise Market is a process of continuously explore and problems inevitably appear. In all the different problems, "Three High Problem"(high issue price, high P/E ratio and high over-financing ratio) is the most typical one. "Three High Problem" brings huge over-financing funds to listed companies in Growth Enterprise Market. Weather over-financing funds influence investment efficiency of listed companies after their IPOs deserves particular attention.This paper firstly uses descriptive statistics methods to qualitatively analyze the phenomenon of over-financing and the efficiency of over-financing funds since Growth Enterprise Market's foundation. And then it shows a case analysis of representative enterprises about over-financing. Based on this, it uses Richardson residual measurement model to estimate the degree of non-efficiency investment in 355 listed companies which finished their IPOs from 2009 to 2012 and verify whether over-financing has a connection with non-efficiency investment. The results show that:(1) From 2009 to 2012, serious over-financing appeared in Growth Enterprise Market. Listed companies which finished their IPOs during this period didn't have good operating performance and experienced a significant decline in profitability in the following years.(2) Most listed companies in Growth Enterprise Market experience over-investment or under-investment after their IPOs. And the number of under-investment enterprises is larger than that of over-investment enterprises, but the degree of over-investment is more serious than that of under-investment.(3) Over-financing has more influence on enterprises' under-investment, but doesn't have close connection with enterprises' over-investment.