Venture Investment,ownership Concentration And The Relationship Between Corporate Performance

Berle & Means in 1932 in their book about the company’s property, first proposed a viewpoint about ownership concentration and corporate performance. Then, this proposition attracted great attention from these domestic and overseas researchers, but due to the difference among the chosen methods, theoretical basis, the research objects and index selection, the studying results are apparently disparate.The successful implementation about growth enterprise market(GEM) on the Shenzhen stock exchange in 2009 bring the Gospel to new innovative small and medium enterprises, high-tech enterprises to solve difficult issues such as financing, and create a favorable market environment for the company’s development. GEM has the characteristics of high-growth, five years from the beginning of the 28 companies listed on the first development to the present 421. However, most of the GEM companies were formerly private family business after the integration of the market, or the family holding, dominance and equity polarization is very serious, and the second agent problem often occurs that big bully small shareholders shareholders situation, which is bound to affect the overall performance and development of the company.Firstly, the research background and literatures sort, and then further elaborated the theory of equity, and then describes the venture capital, ownership concentration and mechanism analysis of corporate performance. Followed by venture capital(VC) is involved, divided empirical test sample set. In 2011--2013 GEM sample company data, empirical research, select ROE as dependent variables, measure of ownership concentration as the dependent variable, and also choose the size of the company and other control variables, the use of correlation and stata software regression analysis, the following conclusions: First, the risk involved in the investment performance of GEM companies to play a role in promoting growth; but with the increasing involvement of venture capital, the GEM companies did not show significant earnings growth promotion, on the contrary, when the proportion of venture capital holding more than a certain amount, GEM’s growth performance was significantly worse condition, suggesting that the relationship between them is not a simple linear relationship, but inverted U-shape, also shows that China’s risk operations and development investment is not yet mature, the introduction of venture capital start-ups should be moderate. Second, the company participated in venture capital, the largest shareholder equity ratio and corporate performance is no significant correlation, but the ratio of the top five shareholders and the top ten shareholders and Corporate Performance positively correlated. This shows that, to venture capital institutions to dilute the stake of the largest shareholder in a certain extent, due to the dominance can effectively alleviate the situation, but ownership remains highly concentrated in the hands of former top ten shareholders. Third, in the absence of participation of venture capital companies, measured by three independent variables ownership concentration(CR1, CR5, CR10) are significantly and positively correlated with corporate performance.In this paper, the empirical analysis of GEM companies equity status quo, to change the stock structure and create a favorable environment for the development company provides the following measures: First, a lot of factors that affect the company’s performance, not simply that only improve equity, can improve corporate performance. We should consider corporate governance environment, historical background, the comprehensive strength, taking the form of equity diversified structure. Second, we must improve our capital environment, create a good competition, while the government and relevant departments should be to improve the legal and regulatory environment, a sound market economy system; third, to strengthen internal controls, and play a supervisory role of stakeholders, to take appropriate of the shares, to avoid polarization, reduce agency problems.