The Research Of The Venture Capital And The IPOs Initial Return Of China’s GEM

As of October2012, there were355companies listed on China’s GEM country, including venturecapital companies participating more than250, which shows a close risk investment and the China’s GEMcompanies, this paper studies the impact of venture capital on the IPOs Initial Return of China’s GEM.Previous scholars on the impact of venture capital on the IPOs Initial Return research mostlybased on Asymmetric Information Theory, and from a single point in time, a single perspective on theimpact of venture capital on the IPOs Initial Return research, there is few scholars overall investment riskcharacteristic differences from the IPOs Initial Return influence on research, especially for our young GEM.This paper is based on previous research results and the actual situation of China’s GEM,IPO OvervaluationTheories and Grandstanding Theory, a comprehensive analysis of the impact of venture capital on theInitial Return of China’s GEM companies, whether the risk involved in the investment from venture capitalholding proportion of shares, venture capital ownership of property, joint investment and joint investmentin four areas of non analyze the impact of venture capital on the IPOs Initial Return of China’s GEMcompanies.This paper selects all companies before October2012in China’s GEM, excluding some ST andfinancial data is not complete and risk investment company purpose is not clear, ultimately involving304sample companies. Respectively from whether the investment risk is involved, the proportion of totalheight of the total percentage shareholding in the venture capital business risks before ten shareholders, theownership of the property before the venture ten shareholders and joint venture capital investment in thenon-co-investment in four areas affected the IPOs Initial Return of China’s GEM for research. Theempirical results show that the involved in the Venture Capital would affect the IPOs Initial Return ofChina’s GEM.That compared with risk-free investment to participate in the company, has higher IPOsInitial Return. Proportion of venture capital holdings and the IPOs Initial Return of the GEM showed asignificant positive correlation, that the higher venture capital stake, the higher IPOs Initial Return of GEMcompanies. Venture capital ownership attribute differences will affect the China’s GEM companies IPOsInitial Return, through theoretical analysis, in this paper, the risk of the government ownership property investment in the company as a benchmark, the results show that compared with the risk of governmentownership property investment to participate in the company, the risk of private ownership of propertyinvestment participation is higher, the risk of foreign ownership property investment to participate in thelowest IPOs Initial Return. So the impact on the IPOs Initial Return, the private strongest, and thegovernment is secondly, the weakest is foreign. For joint investment to our country the IPOs Initial Returnof China’s GEM found no significant impact on revenue. Finally the result of endogenous problems andother robustness test, verify the empirical results.This study provides a theoretical basis for the IPO Overvaluation Theories and GrandstandingTheory. But also for investors to more fully understand the risks of the investment company IPOs InitialReturn of China’s GEM provides the actual data analysis, Also provide an important basis for China’ssmall and medium enterprises in the choice of venture capital, and to promote the healthy development ofChina’s GEM market is important.