Empirical Study Of The Impact Of Venture Capital On IPO Effect Of GEM-listed Enterprises

Venture Capital has experienced rapid development in China over the past 15 years. Foreign background, state-owned background, private background, mixed background Venture Capitals, and limited company and the limited partnership of Venture Capital institutions all exist in the capital market in China. IPO(Initial Public Offering) is the most desirable way for Venture Capital to get profit; however, the IPO effect is widespread in the capital market. At the same time, the mechanism of Venture Capital to enterprise in the process of IPO has attracted a lot of academic controversy. As China’s capital market is gradually established and improved, the opening of the GEM has increased exit channels for Venture Capitals. According to the statistics of China Venture, 55.90% of GEM enterprises were shareholded by Venture Capitals. Venture Capital is more closely linked with the GEM.This paper bases the previous studies, researching the influence of Venture Capital on IPO effect of the GEM. Since the establishment of GEM, here can obtain 3 years of the IPO data before and after 2 years of IPO; therefore, this is a good opportunity to research IPO effect of GEM. Here chose GEM enterprises listed in 2009-2011 years as the sample, use performance-changing to measure IPO effect. Then use the independent samples T test, independent samples Mann-Whitney test, the Wilcoxon signed rank test to test the performance before and after IPO and if there is any significant difference between VC-background a Non-VC-background enterprises. Finally, subdivide the characteristics of venture capital and establish a cross-sectional multiple regression model to study the influence of Venture Capital on IPO effect.The results show that IPO effect due exists in the GEM, VC-background enterprises show weaker IPO effect. Those which have higher shareholding or higher reputation of Venture Capitals have weaker IPO effect,enterprises shareholded by state-owned background Venture Vapitals have stronger IPO effect. The supervision and management function of Venture Vapital has been verified, and the authentication function has been partly verified.