GEM Listed Company Equity Structure Influence Its Performance

GEM board has developed rapidly after its establishment, the number of theGEM board listed companies has increased from the original28to218by May31st,2011. GEM board listed companies represent the new and energetic power in China,and the society pay a lot of attention to the impact of ownership structure on theperformance of it.We choose those218GEM board listed companies as our sample, use7financialindexes such as the debt ability、the profit ability、the property management abilityof those companies. With the comprehensive performance using principle componentanalysis method, we can make regression analysis to research the impact of ownershipstructure on the performance of GEM board listed companies.The following conclusions is what we found in our paper:1.The company’sperformance is significantly and negatively related to the largest shareholder’sshare;2.There is significant and positive relationship between the2nd to5th largestproportion of shareholding and the company’s performance;3.The company’sperformance is negatively related to the index Z, however, it’s not negative;4.There isU relationship between the ratio of state-owned stocks and the company’sperformance;5. There is significant and positive relationship between the ratio of legalstocks and the company’s performance;6. There is significant and positiverelationship between the ratio of circulating stocks and the company’s performance.Based on the conclusions, we provide a few measures to optimize the ownershipstructure and improve the company’s performance:1.Control the higher ratio of thelargest shareholders’ shareholding, meanwhile,increase the proportion of othershareholders’ shareholding;2.Optimize the ratio of state-owned stocks;3.Establish theEquity Restriction;4.Protect the profit of the small investors;5.Strengthen the marketsupervision.