| The results of the new investment model private equity are very outstanding in a current global economic integration world.The new investment result has played a very important role with the development of global economy,such as cultivating multi-level capital market,promoting the development of high-tech enterprises and broadening the financing channels of enterprises.Private equity investment,which originated in the United States,has been active in China's capital markets in recent years.It exactly demonstrates its strong vitality and potential in China.At the same time,Chinese SMEs are faced with a number of issues:financing difficulties,management confusion,which seriously restrict their own development.Private equity as a fact community of interests,if it can be integrated in enterprises,it can not only broaden the financing channels for SMEs,but also provide solutions to the optimization of corporate governance structure and the agency issues.Private equity firms are able to constrain and motivate managers and enhance executive pay-performance sensitivities by developing effective protocol clauses and specific measures,which ensure the interests fairness between senior management and shareholders.This paper investigates the impact of private equity on SME listed companies,and how SME listed companies should choose to introduce appropriate PE investment from the impact of private equity on executive compensation and corporate performance.On the basis of summarizing the existing literature and theoretical analysis,this paper puts forward that the SMEs board with PE participation have higher pay-performance sensitivity than the listed companies with no PE participation.Meanwhile,the proportion of PEshare,the ownership structure of PE and the joint investment status of PE have different effects on the pay-performance sensitivity.In the empirical research part,this paper takes 379 companies listed on China's SMEs board in 2010-2014 as the research object,the above hypotheses are verified by multiple regression analysis of OSL method,and the following conclusions are drawn:First,there is a PE involved in the case of investment companies are more sensitive to the pay-performance sensitivity;Second,when the background of PE for foreign capital background and state background have greater impacts on the pay-performance sensitivity;Third,the shareholding of PE and the number of joint investment of PE was positively correlated with pay-performance sensitivity.Finally,this paper puts forward some suggestions such as establishing a scientific and effective supervision mechanism,perfecting the legal framework,standardizing the information disclosure,increasing the market transparency and the long-term planning of the small and medium-sized enterprises themselves,to promote the better governance on the SME listed companies invested by private equity in China. |
