The Empirical Study Of IPO Effect In The Listed Company Of China’s GEM

GEM appeared in the United States, in1970s, rised in1990s, andthe Nasdaq market as a representative. Our country’s GEM board opened on October23,2009, to June2013have355companies listed in this platform. Our launch of theGEM for SMEs and start-ups companies provide financing channels,promoting its developing, and is conducive to the adjustment of industrial structure,promote independent innovation of enterprises, andestablish a multilayer capital market.But in the last three years, and each time the results of GEM release, are sodisappointed investors for its high growth myth. Theorists call the phenomenon thatthe listed company’s operating performance rising before IPO and falling within a fewyears after the IPO as “IPO effect”. Foreign and domestic scholars found that both themain board market and the small and medium-sized market exist IPO effect. Thispaper will study whether our country’s listed companies’ of GEM have IPO effect andthe factors that affect this phenomenon.This paper sampled153companies in GEM board listed between2009and2010,and studied the performance of the one year before IPO, the year of IPO and twoyears after IPO. First select eight financial indicator which are mainly represented ofcorporate profitability, solvency, operational capacity and the ability of growth, usedescriptive statistics and Wilcoxon test to research of operating performance changesbefore and after the IPO of sample companies and does it change significantly, thenverify does our country’s listed companies of GEM existence IPO effect. Secondly,take the proportion of controlling shareholders, venture capital, raise funds ratio, debtasset ratio, total assets turnover and increase rate of main business revenue asexplanatory variables in multiple linear regression by SPSS, analysed the influencing factors of IPO effect.The results show that: IPO effect happens in Chinese GEM; raise funds ratiohave a negative connection with the listed company of GEM’s performance after IPOwhile the total assets turnover and increase rate of main business revenue have anpositive one; but the proportion of controlling shareholders, venture capital and debtasset ratio have no significant effect with the results after IPO. According to theresearch conclusion and the specific circumstances of the GEM, the paper offerssuggestions from six aspects: strengthen the audit system before prior to listing, toimprove the efficiency of the use of raised funds, improve the mode of operation ofthe venture capital, to improve the quality of listed companies, improve the sponsorsystem, and increase market supervision.