An Empirical Analysis Of The Relationship Between Senior Management Resignation And Share Reduction

After11years plan and preparation，GEM was launched on Oct.23，2009.Twenty-Eight first-batch GEM companies were listed at Shenzhen Stock Exchange.However senior management resignation and reduction in the holding position ofcompany s stock occurred frequently after those companies have been listed in GEMshortly. The public believe that it s Three Highs that gives rise to wealth explosion ofsenior management after having been listed in GEM. With the intent of locking earningsproduced by unreasonable stock price， senior management resigned shortly aftercompany being listed in GEM. However it is just the public s conjecture withouttheoretical and empirical evidence and support. This article mainly researches on theeffect of senior management resignations， Three Highs， and corporate performanceon stock reduction of senior management. In the process of research， the authorbelieves that the data of stock reduction of senior management is affected due to shorthistory of GEM and half-year locking period for stock reduction of senior management.Thereby，this article creatively utilizes senior management s direct and indirectholding position divided by total senior management s direct and indirect holdingposition as the indicator of stock reduction willingness. And then this article attempts tofind out the relationship among stock reduction willingness， Three High and corporateperformance. It is meaningful to reveal the relationship which will provides someinsights for regulation improvement of GEM.This paper based on the Asymmetric Information Theory， Insider TransactionTheory， Agency Theory to analyze the relationship between senior managementresignation and share reduction in the GEM and made the following assumptions:(1) Inthe GEM， senior management resignation s positive effects on share reduction;(2)senior management in the VC-Supporting listed is more likely to reduce shares.Empirical study results verified the hypothesis1and2.This article is divided into five parts: The first part is introduction，mainlyintroducing the research background，research methods and the basic framework of thispaper; the second part is literature review，mainly introducing the empirical analysis onthe relationship senior management resignation and share reduction in the GEM，reviewing the current research status among domestic and foreign scholars， evaluatingthose research literature; the third part is theoretical analysis， describing the relatingconcepts of senior management resignation and share reduction in the GEM， using Asymmetric Information Theory， Insider Transaction Theory， Agency Theory for theanalysis on the relationship of senior management resignation and share reduction in theGEM; The fourth part is empirical analysis， all theory has been hypothesis tested，including sample selection，data sources，variable definitions and descriptions and usethis sample data to make descriptive statistics and multiple linear regression analysis.The last part is the conclusion and suggestion， which is based on previous studies.