Research On Growth And The Selection Of Internal Governance Mechanism

During the 31 years of reforming and opening up, China's economy has made high-speed development, especially in China's restructuring process, many growth-oriented enterprises spawned. High-growth enterprises have advanced technology, good use of valuable resources, constant innovation, unit consumption of the minimum, the highest input-output ratio. Consequently, these enterprises maintain high-speed growth, generate enormous economic benefits to our economy and bring unprecedented power and new life.However, the high-risk company is often accompanied by high growth, so determining the level of growth of an enterprise is essential. In particular, the recent introduction of the GEM relevant policies and the preparation of listing make these companies become a hot issue of social concern. At present, GEM companies are the high-growth enterprises. These companies have many uncertainties and therefore we must pay much attention about them. Organizational environment will directly affect the different investment opportunities, investment opportunities is a distinction of the determinants of business growth. In this paper, investment opportunity set (IOS) is an alternative variable of growth. This article is about the related research of growth and internal governance mechanisms scch as senior managers'shareholders, executives' compensation and the proportion of non-dependent directors. This paper is divided into five chapters, as follows:Chapter 1. Introduction. Growth corporates have instability shareholding structures, corporate incentive and unstandardized supervisory mechanism, invaded and occupied the interests of listed companies, such phenomena is particularly prominent. Therefore, the establishment of good corporate governance mechanisms encourage the growth category for the development of enterprises.Chapter 2 concentrates on the related concepts of growth. First of all, we define the growth enterprises. After the introduction of modern growth theory, and from two angles of the external environment factors, endogenous growth theory and growth theory emphasizes that the growth of the environment is a key factor.Chapter 3. The theory and assumptions. We find out the link between growth and corporate governance mechanism and proposed 3 assumptions:compared with low-growth companies, high-growth companies paid executives higher salaries, inclined to use equity incentives, and maintained a higher proportion of independent directors.Chapter 4. Empirical research component. We use factor analysis method to define IOS. The paper chooses the data of 2005-2007, which matching the filter conditions. Then the paper uses the EXCEL and SPSS 16.0 software for analysis, uses empirical research method.Chapter 5. Conclusion, the policy recommendations, research limitations and follow-up prospects.The main contribution of this paper is:firstly, investment opportunity set (IOS) is defined, especially providing an important basis for the GEM; secondly, this article pointed that owning an abundance of investment choices can have a significant effect on the right of the salary structure, the proportion of independent directors, so IOS evaluation of internal governance mechanisms were also important indicators. In accordance with this conclusion, the GEM companies should establish their own specific internal governance mechanism.