The Effect Of The Private Equity On The Development Of The High-tech Enterprise

Along with China’s innovative society construction, economic structure adjustment andupgrading industrial restructuring, better solving the financing problems of the small andmedium-sized enterprises, especially the High-tech Enterprises, developing multi-level capitalmarket, perfecting our country’s financial market system to provide comprehensive enterprisefinancing platform and service are imperative. On the strength of the above background, privateequity in China has developed vigorously during the recent years. And now it has become one ofthe important ways of financing only second to bank loans and public offerings.In theory, privateequity has the function of finding that value of enterprise, promoting the value of enterprise,expanding financing channels and perfecting multi-level capital market construction.Nevertheless, in the particular situation based private equity developing for short history and theimmaturity of the finance market in china, this paper study on whether it explored the investmentvalue of China’s high-tech enterprise and improved the beneficial long-term development of thehigh-tech enterprises in China, trying to get the the empirical test, which is objective and fairassessment of a private equity investment for the development of high-tech enterprises inChina.This paper is aim at discuss what effects Private Equity have on high-tech enterprises,from both theoretical and empirical perspectives. Firstly, we adopt financial intermediary theoryand modern enterprise theory to interpret the effects of Private Equity on high-tech enterprises.Secondly, we analysis the present status of our country’s private equity and high-techenterprises.And then, we treat GEM (Growth Enterprise Market) companies as the inspectionsamples, use premium index, price-earnings ratio index and the Fama-French three factor modelto introduce an Empirical analysis on the short term and the long term effects of private equityon listed companies. Finally, we summarize the reasons behind the effects. And we put forwardrelevant policy suggestions on the reasons and the present problems.