Empirical Study On Venture Capital’s Effect On The Performance Of GEM Listed Companies

Summing up the foreign venture capital research about impact on the performance of listed companies, in mature capital market, on the whole, is to improve the performance of enterprises. Research on the impact of venture capital on business performance mainly concentrated on the Shenzhen small and medium enterprise board, however, our government has just set up the gem, and the previous studies mainly focus on IPO date which lacks the impact on the performance of listed companies after the IPO. Therefore, the impact of venture capital on the long-run performance of GEM, is of particular significance which can not only determine the risk investment impact on the performance of listed companies, but also provide suggestions for the healthy development of venture capital market.Based on a summary of the relevant domestic and foreign theories and literature, a sample of 355 stocks from 2009 to 2013 in the GEM Market is selected, and the measurement of enterprises’ performance involves three dimensions, that is enterprise profitability(return on equity), operation ability(total assets turnover) and development capacity(increase rate of business revenue). We collected the unbalanced panel data, and applied descriptive statistics and regression analysis method to carry on this empirical research on the relationship between venture capital and the long-term performance of enterprises. The results show that investment risk and the return on equity of the GEM Listing enterprise rate are significantly negatively correlated; investment risk is negatively related to total asset turnover ratio; and a negative correlation with operating income growth rate, but not significantly, namely the risk investment for the long-term performance of GEM listed companies did not play a very good catalytic role. An analysis aiming to explain this empirical result is also carried out from two aspects, the adverse selection of venture investment and the impact on the corporate governance. Finally, based on the study, some suggestions are proposed which are suitable for China.