Empirical Research On The Effect Of Executives Reduction On Corporate Performance In GEM Listed Companies

Since the first batch of GEM listed company shares were lifted in November 1, 2010, the GEM listed companies have suffered a series of large number of reduction, especially significant holdings of cash of the management attracted the attention of all walks of life, which makes executives’ reduction has become the research focus of many scholars. In previous studies, most focus on the analysis of the moving for the GEM executives’ reduction and market reaction after reduction of executives, but the reduction of the performance of the company’s executives rarely affect attention. GEM listed company’s operating results demonstrated management ability and development potential of the company, which is the main focus of investor attention. Large numbers of reduction of executives affect the company’s ownership structure and liquidity of the stock, it will also have an impact on company performance. Exploring the relationship between reduction of the GEM executives and company performance, Revealing the impact on company performance reduction generated, not only can fill vacancies in theory, but also the regulators and investors can make a clearer understanding of the reduction behavior.In the process of the study of the effect of executives’ reduction on corporate performance in GEM listed companies, the contents of the study is divided into the following sections: The first is the introduction, which introduces the research background, purpose and significance and innovation of the article. The first chapter is theoretical analysis, analyzing the effect of executives’ reduction on corporate performance in GEM listed companies theoretically from the perspective. The second chapter is a study design to determine the independent variables, dependent variables and control variables. In order to analyze the relationship between company performance and executives’ reduction, the executives’ reduction is divided into the following factors: the proportion of reduction, the size of the executives’ reduction, average price of executives’ reduction and the ratio of trade price and the issue price. On selecting indicators to measure the performance of the company, the economic indicators Tobin’s Q and accounting indicators ROE are selected in order to show the performance of the company from a different angle. Six hypotheses are proposed on the basis of the provisions of the variables. The third chapter is the empirical analysis. After descriptive statistics, basic correlation analysis and regression analysis, the results of the empirical analysis are got. And robustness tests are made. The fourth chapter is the study conclusions and the inadequate of the research.The study reached the following conclusions: the size of reduction of executives has a negative impact on the performance of GEM listed companies. The larger size of reduction is made, the performance of the GEM listed company is worse that year, conversely the company with smaller size of reduction has better performance that year. GEM executives’ reduction amount affect the company’s performance, and the average price of GEM executives’ reduction is another factor affecting the performance of the company. Average price of GEM executives’ reduction has a positive impact on company performance; the higher average price of executives’ reduction is made, the better performance of the company has.GEM executives as important internal company staff, have important information about the company, so their behavior of reduction is necessary to study. The study of the effect of executives’ reduction on corporate performance not only has important theoretical significance but also has important practical significance. It enables regulators and investors have comprehensive view of executives’ reduction, making some significance for the maintenance of the stability of the GEM market investors, enhancing investor confidence, indicating the focus and direction of the market regulators.