Research On Chinese GEM Executives’ Decreasing Their Shareholdings

After years of preparation, the GEM was launched on October 30.From October 30, 2009 to October 26,2012, the GEM index tumbled from 1,000 points to 685 points, then soaring all the way to 1520 points. GEM has been standing waves of public opinion since its birth. The " three high" of GEM argue has always been controversial. About executives reduction behavior, past researchers have mainly studied for the motherboard, there are few relevant research on GEM. And the current study focuses on the reduction of the company’s total number of reduction, studies for executives personal holdings in current domestic situation is still blank, this paper is the first study to seek for reasons from individual factors why executives reduce their stock holdings.In addition, in 2013 the country’s new leadership took office, vigorously promote the economic and financial system, the IPO reform under this background is also in exploration.This research use normative analysis, empirical research method, combined with data of executives holdings of companies listed on China’s GEM to do theoretical analysis and empirical research, trying to analyze and summarize the two issues:motivations and factors influencing the reduction of the GEM executives, the timing of reduction and Earnings management Research on GEM executives.In this paper, we use date of 1311 executives from 295 GEM listed companies who reduce their shares during 2009 to 2012, the conclusions are:1) Reduction of the GEM executives has positive correlation with senior age and position.2) The reduction of the GEM executives has negative correlation with company performance. 3) Correlation between Reduction of personal data from the executives and the "three high" of GEM is not significant.4) Reduction of GEM executives and their labor under certain company performance is positively correlated.5) In 2012, using positive earnings management to increase the cash value of stock has been improved significantly, indicating that the relevant regulatory policies improve market fairness. Finally, this paper presents a number of policy recommendations for regulating executives of listed companies on GEM. This study aim to promote capital market healthy and sustainable development, to provide investors with a better investing environment.