The Research On The Impact Of Venture Capital On Listed Companies’ Non-efficient Investment

The establishment of the GEM in the Shenzhen Stock Exchange at the end of 2009 marks the formation of a multi-level capital market system, which promotes the rapid development of domestic SMEs. There are several problems exiting in listed companies, such as the highly isolation of the management and ownership, huge agency cost is, information asymmetry problems and so on, which leads managers to make a lot of irrational investment decisions, mainly for overinvestment and underinvestment.In the domestic and foreign research literatures, the study of the risk of investment and non-investment efficiency by scholars has been very thorough in their respective fields. However research on the relationship between them is not too much. Therefore, I chose to explore the impact on the effic iency of investment in non-listed companies from the perspective of venture capital.First, I use some relevant theory for analys is, which turn out to show that the risk of investments can not only p lay a supervisory function to reduce the agency problem, but also play a certification effect as an intermed iary on reducing information asymmetry in outs ide investors, thus improving the efficiency of investment companies.Secondly, in the aspect of empirical study, I use the investment prediction model of Richardson, select the data of companies listed on the GEM by the end of 2011 to measure the extent of its non-efficiency investment. Then study from the overinvestment and underinvestment two lines, introduction of venture capital, proportion of the venture capital, the number of venture capital firms and the nature of the d ifferent risk investment institutions, to analyze the effects on non-efficiency investment. The final conclusion is that:(1) risk capital intervention can significantly improve the listed companies inefficient investment behavior;(2) proportion of venture capital and lack of investment showed a significant negative correlation with the overinvestment no significant correlation;(3) number of VC and inefficient investment are significantly negatively correlated;(4) four nature of venture capital institutions, the private nature and the mixed nature are significant positive correlated with the excess investment, while the state-owned property and underinvestment significant are negative correlated.Finally, based on the findings above, I made some suggestions and hope to make some contribution to improve the invest effic iency of China’s listed companies.