Test On The Nasdag Effect Of China's GEM Board

The official ceremony of China's GEM Board was held in Shenzhen on October 23,2009. It means China's NASDAQ which targeted to promote the growth of high-tech and high-growth SMEs is opening officially.Thus the building of Chinese multilevel capital market is making a big progress.By reviewing the development of NASDAQ market, we can find that NASDAQ plays an important role in promoting the healthy development of small and middle-sized enterprises, which makes NASDAQ market become a model of Growth Enterprise Market. Generally, the effect that GEM board promote the growth of listed company is called NASDAQ effect. Among the developed countries' GEM board, NASDAQ is the most effective and influential one. Academia and the majority of investors are concerned about whether China's GEM board is as successful as NASDAQ, whether it can cultivate China's Microsoft, Cisco and other outstanding enterprises. This paper mainly takes companies listed on China's GEM board as objective, and choose 36 listed companies as samples for empirical analysis. The data is from 2008 to 2009. First, the paper measures the growth of sampled companies listed on the second board with factor analysis method. The following research is based on their related data of 2010, and take the same method to measure the growth of the sample companies in 2010. According to the empirical analysis in the related two years, we can not take the conclusion that NASDAQ effect on China's GEM board has come true. Finally, the paper offers the listed companies some suggestions according to their issues, which will help the companies increase their growth. In addition, the research findings of business growth have important theoretical and practical significance for the enterprise training of GEM board.