| Capital market helps companies raise money which are very important for its development. However, a special phenomena exists in China’s capital market, that is companies changed investment projects after fund-raising. This phenomena exists in every section of capital market and has significant influence on various aspects, companies in different industries are involved. The reasons for this phenomena are complex, including imperfect laws and dysfunctional corporate governance.Though started late and has less companies listed than main board and SME board, GEM board also has lots of this phenomenon of change behavior. Most researchers used main board and SME board listed companies as research objects, but few focused on GEM board listed companies. In this respect, this paper intends to conduct a study on China’s GEM board listed companies.Foreign academia has a breadth and depth of research on various aspects of capital markets and listed companies, such as capital structure, financing cost, financing order and their relations to the value of the firm, and so on, but specific to the point of change behavior, there is almost no related research. The reason is mainly due to foreign capital markets are relatively mature and complete, and has relevant laws in place, the listed companies faces strict legal restrictions when using raised funds. For example, in the United States, according to the provisions of U.S. securities laws, for the investment projects which are decided in the IPO prospectus, the listed companies can’t change them arbitrarily. Companies must apply a complex series of procedures and wait for a very long time if they really want to change them. Additional to the protection of the law, there are market and press supervision mechanism. A group of investors and professional intermediaries are watching the operating performance of listed companies, thus they can’t act rashly. For all these reasons, the phenomenon of change behavior is hardly seen in foreign capital markets, and there are almost no related researches. Compared to foreign countries, the change behavior of China’s listed companies is relatively common, and it has attracted close attention of the majority of investors. Since2002, quite a few scholars have studied this subject. At present, the research is mainly focused on four aspects of change behavior, which is reasons, factors, effects on operating performance of companies, and market reaction.Using information from sources such as the website of China’s capital market authority, this paper analyses the overall situation of change behavior in GEM board from2009to2011, and shows that it has negative impact on capital markets, listed companies, investors.In the process of empirical testing, according to above theories, I made five hypothesis, that for companies listed in GEM board,those with worse performance are more likely to change, those with higher concentration of shares are more likely to change, those with the president of the board and general manager combine into one are more likely to change, those with more raised funds are more likely to change,those with more ultra-raised funds are more likely to change. By using logistic regression, I got the results of empirical testing that support hypothesis1,2,3,4but not support hypothesis5. At the end, I provided some references for improving the efficiency of the financing capital’s use and the development of the capital markets on the base of the related research. |
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