A Study On The Efficiency Of Equity Financing Among The Listed Companies Of The GEM Board

From30October,2009, The GEM board which was long-term awaited inChinese capital market finally began to deal at Shenzhen Stock Exchange. The launchof the GEM board not only perfects the system of multi-level capital market of Chinaand enrich the channels of investment and financing, but also perfects the innovationsystem of development of science and technology driven by finance, which promotesthe development of start-up enterprises, venture capital and strategic newly-emergedindustry, and accelerates the progress of industrialization of scientific andtechnological achievement. Meanwhile, there are some problems in the GEM boardthat not be ignored. Such as serious problems of “three-height”, widespread of fund inidle,“face change” of listed company performance; resignation and cash-out by thetop managers. The current problems existed in the GEM board reflects the lowefficiency of stock equity financing among listed companies in the GEM board whichblocks the development of these companies, damages the benefits of shareholders andcauses the low efficiency and waste of social resources allocation, finally hinders theupgrade of national industry structure and sustainable growth of economy.Aiming at this status, this paper argues that it is necessary to study the efficiencyof stock equity financing among the listed companies in the GEM board. Therefore,the author analyses current problems of stock equity financing among the listedcompanies through the combination methods of theoretical research and empiricalresearch. By using the DEA positive analysis method, the author examined theefficiency of the stock equity financing of companies in the GEM board. In the study,the author found the result, that the stock equity financing among the listed companiesof the GEM board is in the inefficiency state both on raising and using the funds,which is related to low-efficient action of production and operation managementtaken by companies as well as overall environment of the GEM board, mainly for theincomplete operation system in the GEM board.Creative points mentioned in this paper are: clear definition to efficiency of stockequity financing and mention to factors that need to be considered while assessingefficiency of stock equity financing in the GEM board by reference to previousresearch results for financing efficiency and consideration of current status of thelisted companies in the GEM board. This paper positively analyses the efficiency ofstock equity financing among the listed companies in2009by the DEA, evaluates efficiency according to the results from positive analysis and provides solutionsaccordingly.