Empirical Research On The Efficiency Of China’s Growth Enterprise Market

U.S. Nasdaq market is a global success story in the GEM, a large number ofhigh-tech companies on the Nasdaq under the impetus of the initial funding, a smallcompany from the basement office of the rapid development of Apple, Microsoftgeneral multinational companies. These enterprises dominate the economicdevelopment of innovation in America today. Although China after30years of rapideconomic development, but economic innovation ability is poor, small and mediumenterprises financing difficulties, urgent need to establish our own GEM market.In order to develop our country’s innovation economy, high-tech high-growthsmall and medium enterprises financing channels, after a decade of preparation, theGEM market on October23,2009the official opening of the Shenzhen StockExchange.After5years’ development, the GEM market development is not satisfying. Inthe context of the motherboard market weakness, the GEM is stagnating, down fromthe973points to839points on March12,2013. At the same time, there are lots ofproblems,such as a high price-earnings ratio, IPO premium price，price fluctuatedwildly and the company slow growth. The status quo of GEM made the majority ofsupporters of China’s GEM worried, people can not help but asking: whether is GEMmarket one which can promote the development of China’s innovation economy?This paper studies the question wether GEM had played its role in promotingChina’s economic development of innovative financing for small and medium-sizedhigh-tech enterprises. The article starts from the literatures on the efficiency of thestock market at home and abroad. Second,describes the effectiveness of the stockmarket theory and verification methods；third, introduces the course of developmentof China’s GEM market and the world’s major GEM. In the empirical part,the articlestatistically analysises the China’s GEM market, from the market point of view,studyGEM’s industry distribution, scale situation, development status and liquidity analysis,and from the company’s point of view analysis the pace of development andtechnological innovation capability of the earliest28companies listed. GEM poorlyperformed in the past few years, but the market as a whole has growed in thecontinuous development of mature.Most of the listed companies growed rapidly inR&D ability, but there were also a lot of the companied with low grow pace end lessinvestment in research enterprises. And drawing on previous studies of marketefficiency, the empirical part by using the correlation test, runs test and variance ratio test, China’s GEM market has reached the weak-form effectiveness. Finally, furtherlyresearch the semi-strong form effectiveness of GEM, end find that the GEM marketdid not reach the semi-strong form effectiveness. The article at last interpret theconclusion, and give related recommendations.