Financing Effect Analysis On New Third Board Market In China

The small and medium-sized enterprises(SEMs) in China are facing three major financing problems: single financing channel, high financing cost, and low success rate. Therefore, China is actively broadening the financing channels, and actively building a rational and multi-level capital market structure, so as to support and encourage SEMs to finance directly. The National Equities Exchange and Quotations(NEEQ) in china stick to the idea of providing financing platform for high-grown and high-tech enterprises which can not meet the listing stands of main board market and GEM. The new third market not only provides a directional financing platform for SEMs, but also promotes diverse financing ways for listing enterprises implicitly, which is the key power to solve difficult problems of SMEs financing in China, especially playing an important role to incubate and cultivate the high-tech and innovative enterprises. The NEEQ in China was set up in 2006, and expanded to the whole country in 2013, they developed rapidly in short ten years, the positive influence for the cultivation and support of the development of SEMs is amazing. However, the liquidity analysis and directional replenishment analysis showed that, even though the directional placement and issuance increase year by year, compared with the national main board marked and GEM Board, there is still a huge gap, the financing effect of low liquidity in NEEQ has to be improved. In addition, the analysis and research showed that the trading system of NEEQ is not perfect, the layering and delisting mechanisms are absent, and the transferring board mechanism is lacked. These are disadvantages which will impede the NEEQ playing an important role in financing.An empirical analysis is finished by setting up a date model in the paper. The analysis of sample data shows that the financing activities of listing enterprises of NEEQ are conductive to improve its profitability and development. It is significant for the financing function/ability of NEEQ to improve the SEMs, cultivate the high-tech enterprises and support the innovative enterprises. Therefore, it is significant to take more measures simultaneously to improve the financing ability of NEEQ constantly. The paper studied related mechanism of NEEQ in developed countries such as Britain and America, it finds that the NEEQ in developed countries is developed more mature, the related system is more perfect, the threshold of market access is lower, application procedures are not complicated, the supervision and management of listing enterprises is not strict, and there is no scale or operating profit requirements, the financial intermediation efficiency is very high, which brought great convenience for the financing of SEMs, compared with other high level capital.On the basis, the paper proposed some proposals about how to improve the financing effect of NEEQ from three aspects. Firstly, taking effective measures to expand the scale of financing for the NEEQ from the following aspects: increasing attention to investors, expanding the financing scale and reducing and improving the listing application standards. Secondly, by consummating the ancillary system-building, to establish and perfect the delisting mechanism and set up the hierarchical mechanism. The establishment of hierarchical mechanism in NEEQ is conductive to differentiated management and to establish incentive survival of the fittest mechanism, optimizing the allocation of resources, which can better regulate and provide professional services. Finally, the efficient and convenient transfer mechanism should be established, for promoting diverse transfer modes. Management in our country should learn the construction experience of transfer mechanism from the developed countries like Britain and the United States. According to actual situation in China, it is a good time to accelerate the introduction of transfer mechanism, in order to provide a more convenient financing environment. The standards and modes of transfer mechanism should be flexible and diverse so that the enterprises could choose appropriate financing ways, and reduce the cost of financing on the basis of actual situation. We have reasons to believe that, through endeavor, current problems about NEEQ will be solved, and NEEQ will play a great role in public entrepreneurship and innovation era.