Research On Comparison Of The Performance Before And After IPO About Chinese Listed Companies In GEM Board

The Growth Enterprise Market is designed to provide a broader platform of financing to enterprises that have the high-tech or high growing ability and whether it could play an important role in the capital market of China is a significant part in building and developing the multi-level capital market.This paper aims on investigating whether the "IPO effect" exist on the GEM of China and analyzing the reasons that change the performance of enterprises listed on the GEM before and after the IPO through the empirical analysis to provide some valuable suggestions to the development and improvement of the GEM, so that the overall performance of the GEM will improve.This article uses the theories and methods of several disciplinarians to form the framework and idea of the comparative study about the enterprises performance before and after the IPO in the GEM of China from the theories of the "IPO Effect ", the developing process of the GEM market and the evaluation methods of enterprises performance, combining the characteristics of the GEM in China.This paper chooses the earliest 36 listed companies landed on the GEM as the sample to select eight financial indicators which are mainly represented of corporate profitability, operational capacity, solvency, the ability of growth and construct a comprehensive business performance indicator based on subjective weighting method to make an overall assessment about the performance of the listed companies. Then the paper uses the statistical analysis and method of paired T test with the evaluation index system to confirm that the GEM of China exist the "IPO effect " overall and all of the industries exist the "IPO Effect" in different degrees. Then use the ANOVA F test and univariate-multiple factors F test to empirical study the performance changes of the listed companies on the GEM before and after their EPO separately, grouped by the overall sample, the VC background and non-VC background samples, as well as the different industry sectors samples. This research shows that except the solvency turns better then what it shown before the IPO, the corporate profitability, the operational capacity and the ability of growth all turns worse. In addition, the VC background is not the main factor that affects the business performance of the listed companies. On the contrary, Industry factors could affect the performance of the companies listed on the GEM.Based on the above conclusions of the empirical research, this paper offers three recommendations to the GEM market in China, such as, to strengthen the assessment system of the listed companies, to diversify the industrial distribution and to improve the supervision system.