The Research On The Growth Of Companies Listed On Growth Enterprise Market

Growth Enterprise Market in China as an important part of the multi-level capital market has been run successfully for3years after a decade of preparation. On the one hand, it provides a more flexible and effective financing channel than traditional securities market for small and medium-sized high-tech enterprises. On the other hand, it uses incentive mechanism to accelerate the mature evolution of SMEs, so that some family businesses and partnerships transform from the low-level form into standardized modern enterprises. It helps enterprises to improve their corporate governance structure. Small and medium-sized high-tech enterprises enhance their visibility through listing on the GEM, and get the opportunity to Investors’investments, mergers and acquisitions, which can help the SMEs to expand their scale. The target service object of the GEM market is SMEs.GEM pay attention to the SMEs growth, but not the past performance. Growth is the basic indicator to measure the results and developing prospects of listed companies. Growth is the key to the success of GEM. Investors make investment decisions base on firm growth in GEM. Firm growth is more important than the performance for GEM. Firm growth includes not only the performance of the company, the expansion of the scale, the promotion of the quality of enterprise intrinsic, but also a dynamic process of change. Thus, researching the firm growth is particularly important.The purpose of this study is to discover the growth of the listed companies in GEM, as well as the specific factors that affect the growth of the companies by analyzing the financial data of companies listed on GEM. This paper uses the GEM listed companies as sample. It is divided into six chapters. First of all, by reviewing enterprise growth basic theory in Chinese and foreign relevant literature and using normative analysis, it describes the basic theory of the firm growth to provide a theoretical basis for the following empirical research. Secondly, it introduces briefly the development profile of China’s Growth Enterprise Market, in order to make an overall understand of the GEM. Again, it builds evaluation index system. In reference to existing literature and thinking the unique characteristics of GEM, it selects seven levels which is the profitability, operational capacity, short-term solvency, long-term solvency, cash flow ability, capability development and risk levels. The evaluation index system is composed of25specific indicators constitute. Finally, it uses factor analysis empirical research on the selected financial data of319enterprises, obtaining common factor score and a composite score of319sample business growth. The conclusion is that corporate profitability, short-term solvency, cash flow ability, operating capabilities, long-term solvency, capacity development and the level of risk all impact the firm growth of the company listing in GEM, and the impacting level weakens in turn. At the same time we can see how the overall growth of the companies listed on GEM based on comprehensive Growth score. This analysis can give the management some recommendations for management decision-making, and provide investors with investment reference.Although I have learned a lot in the course of the study, the study still has some inadequacies. First, I know clearly that non-financial indicators is tremendous important for the enterprise growth, but I do not select non-financial indicators in the construction of the evaluation index system. Although the non-financial indicators are difficult to achieve, it still causes that index system is not comprehensive enough. Secondly, the data selected in this paper is the cross-sectional data in2012. It is not years’ data, which results in that it didn’t make dynamic analysis of the GEM firm growth. Finally, I consider only the internal factors, without considering the outside influences such as the macroeconomic performance, the tendency of national policy, the development of the competitors and so on. I will continue to overcome the issues and do more in-depth analysis in the future.