Empirical Study On The Impact Of Managerial Ownership To The Enterprise Value

GEM, known as the second board market, is different from the main board market. Its target is to provide financial support for entrepreneurial enterprises, small and medium enterprises (SMEs), and high-tech enterprises. Compared with the motherboard market, GEM shows more relaxed listing requirements, specially when the market created, both in the capital scale and long-term performance requirements are lower than the motherboard market does. Since more than half of the second board market listed companies belong to entrepreneurial enterprises, it is also known as GEM. GEM’s most important feature is its low barriers to market entry, stringent operational requirements, to help the SMEs with the development potential access to financing opportunities. GEM provides incentives for company and encourage employees to convert technological innovation into reality, so that it can solve effectively shortage of entrepreneurial enterprises incentives.October2009, China’s first batch of GEM companies traded. A year later, the GEM ushered in the first peak. But lifting the ban of GEM accompanied with Shanghai Composite Index and GEM index fell sharply, it caused public deep suspicion of management shareholding reduction of listed companies on GEM, especially suspicion of senior management staff. As GEM substantial reduction of the company’s management, do the companies still have invested value? It should be acknowledged that the management of listed companies underweight or overweight shareholding, it is an inevitable market behavior. Management cannot always hold shares of the company’s fixed. Then the further question is:GEM’s management and shareholding percentage change impact on company value? Where changes in management’s holdings of listed companies on the impact of enterprise value path? Why is the management of a listed company to change its equity share holdings? Obviously, this is not only a theoretical value, the more significant practice value worthy of our in-depth study.In this paper, we will take the Shenzhen Stock Exchange companies from2009to2012listed in GEM as samples. Its target is to explore the relationship between enterprise value and the managerial ownership ratio on the GEM companies. According to the surroundings of GEM companies, we also start to explore the intrinsic link between enterprise value and personnel management stake, the intrinsic link between enterprise value and the management ownership time, thus coming to the conclusion of this paper. Exposed of the existed problems, lastly we put forward to some recommendations.In this paper, taking the empirical research methods, combined with the use of inductive analysis and comparative analysis method to study the relationship between the management shareholdings of GEM listed companies with enterprise value. In the empirical analysis, this paper used the SPSS20.0statistical analysis software and EXCEL software for data processing and data analysis, statistical methods used are mainly descriptive statistics, correlation analysis and linear regression analysis.In addition to the introduction, this paper is divided into five chapters, the study of the relationship between the management shareholdings of companies listed on GEM and the corporate value of holdings by empirical analysis. The first chapter is a literature review, the main contents of chapter are:managerial ownership and enterprise value linear correlation theory; managerial ownership and enterprise value nonlinear theory; managerial ownership and enterprise value not relevant theory and literature review. The second part is an overview of the theoretical value of the relationship between managerial ownership and enterprises value. The contents are:the basic theory of managerial ownership overview, the basic theory of enterprise value overview, the assessment index of enterprises value and the general theory of equity incentives. The third part puts forward the empirical hypothesis. The main content for the listing Corporation management board shareholding proportion is positive to corporate value, and the proportion of management personnel is positively related to enterprise value, managerial ownership period is positively related to corporate value. The fourth part is the research design and empirical testing. The first is the study design, sample selection based presentation and data sources, using SPSS statistical analysis software to run and process data, has conducted descriptive statistics, correlation analysis, regression analysis and robustness tests, come to the conclusion that a linear relationship between the GEM managerial ownership and corporate value. The fifth part of the policy recommendations in this chapter based on empirical evidence derived from the foregoing conclusions, make relevant policy recommendations. These recommendations include combining monetary compensation and equity-based compensation, establishing a reasonable salary incentive mechanism; improving managerial ownership structure form of ownership to building a ladder program; developing time-bound program management ownership and robustting reward system administrator.Because GEM is an emerging financial market, little research is related to the intrinsic link between managerial ownership personal ratios and enterprise value, relationship between Managerial ownership period and enterprise value companies listed on GEM. Thus, these two aspects will be to explored and researched directions.