Study On The Effect Of Investor Irrational Behavior To Over Finance Of The GEM

China's capital market exists the phenomenon of excessive equity finance, since theGEM(Growth Enterprises Market)incepted, three tall phenomenon has been serious, theregulators and the scholars pay attention to the listed companies financing excessivelyphenomenon. The reason of companies excessive equity finance include many aspects,this paper research the reason of the listed companies over finance from the point ofirrational investors behavior, this article has important significance,such as tocultivate rational investors and improve the GEM market.This paper use the method of combination of theoretical research and empiricalresearch, first of all, the paper review of foreign and domestic research, these two aspectsseparately from the impact of excessive equity finance and the irrational investors oncorporate financing were reviewed,and proposed research opportunity based on theretrospective. Secondly, defined the concept of the excessive finance and irrationalbehavior, theorical analysis from the behavioral finance perspective,proposed people'scognitive bias and mood makes people product irrational behavior in invest. At the sametime,this paper stated the development history of GEM and its significance, testd thepresence of excessive finance on GEM. Then analyzed the causes of excessive finance andthe harm of excessive finance.On the basis of the above analysis, made153companies in2009and2010as samples,the paper empirical study of the irrational investment how effect company over financing,introduced the market level and two level market irrational investment index as anexplanation variables, enterprises scale before the issuance, profit ability, growth ability,industry and time are control variables. Through the empirical correlation test and linearregression can be obtained that irrational investment behavior caused excessive financingto some extent. According to this conclusion, proposed investors should be appropriatemanagement, make investor strengthen GEM investment risk consciousness, and putsforward the specific investment strategy for investors. In addition, propose strategies ofcompanies and regulators to avoid excessive financing, and put forward reasonable proposals of standardize the GEM financing behavior.