Based On The Gem Listed Companies In China:a Study Of Relationship Between Cash Holdings And Enterprise Growth

With the policies supporting for small and medium-sized enterprises in our country, more and more small and medium-sized enterprises choose to be listed on the GEM and show good growth and development situation, in order to become the new strength of national economic construction, and play an increasingly important role. The GEM requires the listed companies to keep higher growth for this market as it is easy to enter but need high standard to exist. The companies listed on the GEM must improve their business scale and main business income in a short time, to reflect its growth potential to achieve gem refinancing. The gem listed companies mostly are startups and high-tech leading enterprise with higher capital investment needed to achieve its high growth. Besides, it is necessary to invest more money to support its growth while enterprise in life cycle as well. That is to say, cash is low risk and low income assets, holding too much cash must lead to miss the opportunity cost of effective investment, will only lead to lower risk-free return. For the gem listed companies, how cash holdings to affect the growth of the enterprise; for financing constraints companies, how cash holdings to affect the growth of the enterprise; For the listed companies under the defects in corporate governance, how cash holdings to affect the growth of the enterprise; And how to broaden the gem listed companies financing channels, how to maintain a proper corporate cash holdings to maintain good corporate growth is the subject in this paper, This essay studies the gem listed companies, selecting the data of 2012-2014 as sample, using descriptive statistics, regression analysis method to achieve objective result. In addition, this essay also uses the variables such as return on net assets, financial statement data to study the gem listed company business growth.On the basis of the above efforts, this article is aimed at discovering the relationship between enterprise growth and cash holdings for the gem listed companies, so as to improve the enterprise growth.The innovation of this article will be shown in two aspects:on the one hand, the research object in this article is the gem listed companies. The gem is officially released in 2009, so the gem companies economic data are insufficient, scholars tend to focus on the main board market enterprise development. However, the main board and gem are different both in scale and development patterns, the characteristics of enterprise listed on the main board do not fully comply with the gem listed companies. In other words, research conclusions in the aspect of enterprise development main market cannot guide completely gem listed companies. So this article specially studies the relationship between cash holdings and growth for the gem listed company. On the other hand, the domestic and foreign scholars mainly study the influence factors of cash holdings At the same time, they focus on how to determine a proper cash holdings. This article chooses cash holdings for the angle of view to research the influence on enterprise growth. As a result, the second innovation point of this article is to study consequences on cash holdings, and the relationship between cash holdings and growth of firms.