Research To The Impact Of Private Equity Impact On The Performance Of Companies In The NEEQ

Private equity(PE) refers to already have a certain scale, with a certain business model,the main business products, a certain market share, but also be able to produce mature and stable cash flow businesses were part of the equity investment. Private Equity is one of the most exciting financial innovation achievements with the transformation of the financial markets,which originated from US during the 1980 s. Through the development for decades,PE rises rapid and develops into world’s third-biggest financing market. In recent years,China’s capital markets are enthusiasm for PE. We’re much more expansive in PE financing year by year. PE can provide "value-added" service for enterprises through capital operation,professional perspective and investment experience, which is important to promote the development of the small-sized and medium-sized enterprise. PE also can provide support for building the multi-level capital market system, helps promoting real economy growth.Enterprises listed in the China’s NEEQ are essentially the small and medium-sized companies,which cannot meet requirements for main board market, the Shenzhen SME board. To achieve company’s listing and growth, the small and medium-sized companies need support from PE.As an increasing number of PE become more involved in company’s listing in the mainland NEEQ,extending the research about how PE affects companies performance for enterprises listed in the China’s NEEQ is particularly significant. However, there is little research about how PE affects business performance for enterprises listed in the China’s NEEQ, and how PE with different characteristic affects companies performance is not clear.According to above ideas, using enterprises listed in the China’s NEEQ over the2011-2013 period, And ROA, ROE for the performance observed variables to stake PE, the background of the shareholders as well as joint investment of explanatory variables, using OSL further test whether the model of private equity investments with different characteristics will be impact on business performance differ in direction and degree. First, we find the performance of companies invested by PE institution is better. PE can improve the performance of invested enterprises. Second,the higher of PE investors shareholding, the better performance of invested enterprises, because of agency cost-reducing and managerial level-increasing. Third, joint investment of PE investors can improve the performance of invested enterprises, because of agency cost-reducing and more resources. At last,PE withstate connections can improve the performance of invested enterprises, because of government support and more "value-added" service.This study illustrates the impact of the mechanism for enterprises listed in the China’s NEEQ to explore the different features of PE investment in corporate performance influence the direction and strength to enrich the document PE investment and corporate performance research.