Study On The Relationship Between The Capital Structure And Value Of Companies Listed On GEM In China

with the first 28 companies listed on the GEM,China's GEM market was formally established on October 30 th,2009.As one of China's multi-level capital market system,the Growth Enterprise Market(GEM)has developed rapidly since its establishment.By the end of Octomber 2016,the number of listed companies in China's GEM has soared to 546,and the total market capitalization has exceeded 5.5916 billion Yuan.The GEM market not only provides an open financing channels for small and medium-sized innovative enterprises in China but also plays an important role in these companies' rapid development.Compared with the main board,the capital structure of the companies listed on GEM in china is unique: Asset-liability ratio is generally at a low level,on the contrary,equity concentration index is higher;In addition,although the development of the GEM market in full swing,but the overall operating conditions of GEM companies isn't Optimistic,the number of listed companies with negative growth of profits was 161 in 2015,and it has exceeded 1/3 of the total number of listed companies.And The decline in profits will have a negative impact on the corporate value of listed companies in a certain degree.Is there any correlation between the capital structure of listed companies on the GEM and the enterprise value? If there is a correlation then what would it be? How should the listed company adjust its capital structure to enhance its enterprise value? These problems plagued China's listed companies need to be resolved urgently.As China's GEM market was established later than the foreign developed markets,domestic and foreign scholars for China's GEM companies listed on the relationship between capital structure and corporate value relationship has not yet formed a system,so this article takes 277 companies listed on the GEM between 2011-2015 as research samples,taking earnings per share as explanatory variable,selecting alternative indicators of capital structure from debt structure and equity structure respectively.The paper fund that LEV,SD,LD,CD and CR1 are negatively correlated with firm's value.,while SH,LP,CR5 and GP are positively correlated with corporate value.Based on the research result,the paper puts forward the measures from two aspect including focusing on their own capital structure adjustment from the internal and looking for supports to strengthen the market environment from external to optimize the capital structure of China's listed companies on the GEM in order to provide positive and constructive suggestions for enhancing the value of listed companies,and promote the healthy and sustainable development of listed companies in China's GEM.