Top Management Team Characteristics Influence On The Growth Of Enterprise

The 18 th National Congress of Communist Party of China clearly stated that we should put forward to implementing the innovation-driven strategy, emphasizing "technological innovation" which is the support for improving the social productive forces and the comprehensive national strength that must be placed at the core of the overall national development. It also stressed that we should insist on taking the road of independent innovation with Chinese characteristics unswervingly. In the third five-year plan, it also puts great emphasis on the technology innovation which is the core of overall innovation. Therefore, the government adopted some related policies to support the development of high-tech enterprises and strategic emerging industries, such as finance, human resources, research and so on. The main purpose of Growth Enterprise Market(GEM)is to provide financing channels for these high-tech enterprises and minor enterprises which is unsatisfied the qualification of the Main Market, and to supply the opportunity for the survival and development of these high-growth and high-tech enterprises. Because of the characteristics of GEM listed companies has high-growth accompanied by a high risk, the GEM as the best channel for venture capital also attracted a lot of attention.China’s GEM, founded in 2009, has developed rapidly. In the beginning, it only has 28 companies, and now it expended to 492 companies. Through seven years of developent, the institution and management of the GEM are becoming standardized, but there are still many malpractices, for instance,the un-standardized information disclosure and serious speculative atmosphere. At present, the GEM listed companies are mostly characterized with high growth whose feature is "two high six new" or state-supported strategic emerging industries, but many negative information was reported frequently, e.g top management reducing holdings and speculative behavior, and these cause the investor’s suspicion for the growth of these companies, Annual Financial Report and trace analysis reports of institutional investors both have shown that the growth of GEM listed company was lower than expected, and some companies even was revealed negative growth, so it is essential to study the growth of GEM listed company. Confronted with the complex and changing environment, Strategic decision and competitive strategies of corporate play an important role which is the key of the living and development of enterprises. As we all know these strategies are proposed by top management team(TMT), it is very important for the GEM listed companies as the core of enterprise human capital. That is to say TMT act as an important role and decide the enterprise’s growth. To study the effects of the TMT on enterprises’ growth is beneficial to construct a reasonable top management team for company, and it is significant for enterprises’ sustainable development. Existing researches show that top management team characteristics can have influence on the growth of enterprises through strategic decisions or technological innovation, or have a direct impact on business growth. There are few papers study the relationship between TMT characteristics and the growth of the GEM listed company. Therefore, this thesis analyzes how TMT characteristics influence on the growth of enterprise more deeply.First, this thesis introduces the research background, purpose, significance and methods, and establishes framework of this thesis. Second, this thesis sorts out those existing researches at home and abroad about the growth of enterprise and TMT characteristics synoptically, and gives a brief introduction of the theory of the enterprise’s growth, and defines the concept of TMT and the GEM listed companies. Then, according to current researches and the actual situation about China’s GEM, this thesis proposes hypotheses, constructs the theoretical model, uses statistical software to analyze the collected data, and draws conclusions. Last, this thesis put forward to some related policies based on foregoing conclusions and the lacking of this research. In accordance with domestic and foreign research, this thesis uses factor analysis to build the GEM company’s growth evaluation system with SPSS20.0 and Stata13.0. Our data was collected from the CSMAR database of financial statements of listed companies and the huge influx of information network, and we can use these data to calculate the comprehensive score of the growth. Then, on the basis of current researches about top management team, this thesis divides top management team characteristics into homogeneous characteristics and heterogeneous characteristics, these data about characteristics was collected form CSMAR corporate governance structure of the database, annual reports of listed companies and the East Fortune network. Finally, this thesis leads into control variables and constructs the GEM company’s growth comprehensive score and top management team characteristics regression model, and uses these data to do descriptive statistics and regression analysis.Through the above analysis, we found that top management team characteristics can affect the growth of the GEM company, but different characteristics have different influences. For example, some characteristics have a significantly positive impact on the GEM company’s growth, such as women’s participation in top management team, the average education level of top management team, the size of top management team, which are matched with our hypotheses. The heterogeneity of education level is positively correlated with the growth of enterprise, but the result is not significant, the relevant hypothesis of the research is partially supported.We assumed that the average tenure of top management team is negative for the GEM company’s growth, but the consequence shows that the average tenure is longer, it is more beneficial for the enterprises growth, although this is opponent with our hypotheses, it verifies that these enterprises’ performance is poor whose top management team turnover rate is high. While there are some characteristics have a negative effect on the growth of the GEM company, such as the average age of top management team, the age heterogeneity of top management team, the tenure heterogeneity of top management team and heterogeneity professional background. These results are consistent with our hypothesis. At the same time, we found that firm size, the percentage of independent directors and the chairman concurrently general manager can affect the growth of the GEM company.