Research On The Effect Of Executives' Reduction Behavior For The Value Of GEM Companies

GEM is a new type of second board market in China,which serves small and medium-sized innovative and entrepreneurial enterprises.The healthy development of GEM is of vital importance to China's economy.However,the frequent reduction of executives in GEM enterprises has attracted the attention of scholars at home and abroad.This article hopes to provide some help and suggestions for the government,investors and enterprises by studying the impact of the reduction of GEM executives on the company's value.In this paper,the normal operation of GEM from 2015 to 2017 is selected as the sample of long-term research scope,2017 data is selected as the sample of short-term research scope,enterprise value is taken as the explanatory variable,reduction or not,motivation,scale and price are taken as four independent variables,regression analysis is carried out under the selected control variables,and the change rule of enterprise value affected is obtained.The empirical results of this paper show that,on the whole,the senior management's reduction operation has a negative impact on the enterprise value,and the long-term reduction will cause more damage.The reduction of mobile motivation has a significant negative impact on the enterprise value,and the long-term reduction motivation is more obvious.The relationship between the scale of reduction and the enterprise value is " U" curve in the short term,but the conclusion is not significant in the long term.In the short run,the transaction price of reduction is positively related to the enterprise value,but in the long run,the impact is not significant.The reduction behavior of senior management will affect the enterprise value itself,but more is the signal that the information of senior management reduction sends to the market,which affects the decision-making of external small and medium-sized investors,thus affecting the enterprise value.The government should improve relevant laws and regulations to strengthen supervision,enterprises should improve their governance methods to reduce principal-agent conflicts,investors should also rationally analyze the reduction behavior and make scientific decisions,and all parties should work together to safeguard the fairness and stability of the GEM market and the good development of enterprise.