Research On Investment Efficiency Of Listed Companies On GEM

The GEM in our country has received extensive attention from all walks of life since it was set up, and listed companies on GEM also have born with so many people’s expectation. However, Many GEM companies exposed a lot of problems after they listed, such as great changes in profits, frequent resignation of senior managers, disorder usage of capital, GEM stock market’s strong speculative atmosphere and so on. These problems raised public’s concern. As everyone knows, investment will not only affect the current performance and future development of enterprises directly, but also can affect the allocation of social capital and the use of efficiency indirectly. Besides,in the environment that constantly innovative economic development mode and increasingly fierce competition,it’s particularly important to restrain inefficient investment behavior and improve their investment efficiency for GEM listed companies. And these all on the premise of knowing GEM listed companies’ investment efficiency and its influencing factors. Therefore, it is significant to study the investment efficiency of the GEM listed companies.The establishment of China’s GEM is not with a long history, there are few dedicated researches on investment efficiency of listed companies on this special board. And the research on the investment efficiency of listed companies in Shanghai and Shenzhen main board were mostly from the perspective of traditional financial theory, the research conclusion is based on the hypothesis of "rational economic man" and "efficient market". But a lot of practice shows that, in reality, enterprise investment is not completely rational. China’s GEM market is a market full of noise, the GEM listed companies’ managers and outside investors are more likely to arise irrational psychology. The paper conjectures that these irrational psychological will affect the efficiency of corporate investment. Therefore, this paper takes in a new perspective of behavioral finance theory, researching on whether these two irrational psychological emotions affect GEM listed companies’ investment efficiency or not. That is to say, the paper is based on behavioral finance theory and focuses on three questions:(1) how about investment efficiency of listed companies on GEM?(2) Does the irrational psychology of the managers have an impact on the investment efficiency of the GEM listed companies?(3) Does the irrational psychology of the outside investors have an impact on the investment efficiency of the GEM listed companies?This paper is in accordance with the order from theoretical analysis, to the empirical research, and then to the countermeasures and suggestions. This paper first collects and sorts out the relevant literature on the investment efficiency of the listed companies, and expounds the supporting theory of this paper. Then it is based on behavioral finance perspective, and theoretically analyses psychological factors that may affect investment efficiency of GEM listed companies, especially expounds the influence mechanism of these two types of irrational psychology, and it is from aspects like behavioral motivation and the channel of investment catering. The empirical part draws lessons from Richardson(2006) residual model; the first one measures the investment efficiency of GEM listed companies according to the financial data. On the basis of this, it selects index of managers’ irrational psychology and outside investors’ irrational psychology, then does empirical research whether these two kinds of irrational psychological emotions will affect GEM listed companies’ investment efficiency or not. The empirical results verify the conjecture of this paper. According to this, the article finally puts forward to countermeasures and suggestions to reduce managers’ and outside investors’ irrational psychology on GEM, and thus improves the investment efficiency of listed companies on this board.