A Study On The Relationship Between The IPO Over-financing And Company Performances

The Growth Enterprise Market was established in 2009,as a securities trading market offering the financing channel for those companies,which have the features of high-growth and innovation.The market is famous for low threshold,big risk and regulation strictly.It is a powerful supplement of the main board market,making a great contribution to improve the capital market.In the meanwhile,the phenomenon of over-financing had appeared and draw widespread attention from all works of life.This paper made a literature review on the current study situation of domestic and overseas on IPO over-financing first,not only defining the related concepts,but also analysing the logical relation between IPO over-financing and company performance from the view point of capital structure,information asymmetry and free cash flow,perfecting the related theory.Then the present situation of IPO over-financing was introduced from two aspects,industry distribution and investment orientation,through the collection and quantitative analysis of related statistical data.In addition,the paper analyses the reasons for this phenomenon respectively from the macroeconomic environment,capital market system and profit-driven market participants.The paper chose 346 companies which listed in the Growth Enterprise Market from 2009 to 2012 as the research object.Over-financing rate was the dependent variable;logarithm of total assets was the control variable and company performance was explained variable.The comprehensive evaluation value,calculated according to scores of the three factors extracted from nine financial indicators by the factor analysis method,was used to evaluate the company performance.To take time into consideration,the relation between the company performance in the 1-3 years after IPO and over-financing rate were respectively analysis.The conclusion was that the company performance and over-financing rates showed a negative relationship in general.The correlation was significant in the 1-2 years after IPO,even showed slightly strengthen trends in the second year,but in the third year greatly weakened.Finally suggestions,put forward for perfecting the GEM financing phenomenon,were consummating the Growth Enterprise Market system,strengthening corporate governance,perfecting market supervision system and enhancing the education of investors.Through the above measures,it could realize the function of optimizing the allocation of society resources in the Growth Enterprise Market.