IPO Effect Research Of Companies Listed On Chinese Growth Enterprise Market

Chinese Growth Enterprise Market (GEM) was established in October2009. Itprovides a listing platform for high-technology companies with high-growth. At the sametime, it enriches the capital market. Companies’ operating performance fell sharply afterIPO (Initial Public Offerings) is called IPO effect. This phenomenon exists in the mainboard and SME board. There is an important significance to the development of capitalmarket and the judgement of investors to analyze that whether IPO exists in GEM.First of all, this paper introduces the development status quo of the GEM andprovides a theoretical basis for the article based on the summarization of the status ofresearch on IPO effect.The second, we test the existence of IPO effect of companies listed on GEM. Weselects145companies listed on GEM during2009to2010as samples. Then selectfinancial indicators from four aspects of profit ability, growth ability, operation ability anddebt paying ability, and use paired t-test to test the significance business performancebefore and after IPO. Studies show that obvious IPO effect exists in GEM.Once again, the paper discuss influncing factors of IPO effect according to differentgroup.Then from the presence of the VC background, ownership concentration, nature ofthe biggest shareholder and the year of listed companies, we analyze that whether IPOeffect exists on each grouping or not. This section elects ROE as financial indicator, anduse paired t-test to test the significance business performance before and after IPO. Theresults show that the risk investment has inhibition effect to IPO effect; the higher theownership concentration, the smaller the IPO effect; IPO effect exists in both sampleswhether the biggest shareholder is a legal person or natural person; IPO year of samplegroup affects IPO effect.The last, the paper put forward to promote the healthy development of the GEM andreduce IPOeffect.