The Empirical Study On The IPO Effect Of SME Board In China

SME board is short of small and medium-sized enterprises board, is approved by the State Council of China, set up in Shenzhen Stock Exchange Market in 2004. The introduction of SME board plays an important role in building multi-level capital market in China, and provides a new way for China's small and medium-sized enterprise raising more money for their development. The SME board has been developing rapidly since its establishment, more and more enterprises raising a lot for their development by IPO in the SME board, until the end of 2015 770 companies listed in the SME board. These companies raised 515.24 billion yuan just by IPO. By IPO, these small and medium-sized enterprises can improve its capital structure, enhance the ability of resisting risk, increase the company's visibility and brand value, attract more talents and so on a series of benefits, and these enterprises after IPO should have a better performance, but that is not the case, many domestic and foreign scholars'study found a phenomenon in kinds of capital market-the IPO effect.IPO effect refers to the phenomenon that the operational performance of the corporation slides after their IPO. This phenomenon has been proved by many scholars in all kinds of mature capital markets, China's SME board is relatively less mature since it was established in a relatively short time, with the advent of the ST Companies in SME board, the existence of the IPO effect has noticed by more scholars. Based on the research of previous scholars on IPO effect, this paper research the existence of the IPO effect in in China's SME and analysis its factors from the perspective of corporate governance.This paper choose the companies listed in the SME board in 2004-2011 as the research sample, select seven indicators of profitability, debt paying ability, growth ability and operation ability four as the indicator to measure the operating ability, choose two years before the IPO, the year when IPO and three years after IPO as the research time interval, by compare the financial indicators' changes between before and after IPO to verify the existence of the IPO effect in SME board and compare the operating performance between the managers' Shareholding group sample companies and non- managers' Shareholding group sample companies in the years before the IPO?the year when IPO and the years after IPO. This paper use the related sample t-test and Wilcoxon test to test the existence of IPO effect, use the independent samples t-test and Mann-Whitney test the research the sample companies' operating performance before the IPO? IPO and after IPO. This paper analysis IPO effect's factors from the perspective of corporate governance with a cross sectional multivariate linear regression model. This paper includes the following five parts:The first part:introduction. This part mainly discusses this research background, this research's meanings, the content and methods of this study, the framework and the logic of this research and the innovation of this paper.The second part:the literature review and theoretical basis of IPO effect. This part discusses the domestic and foreign mainstream of IPO effect theory and research literature of domestic and foreign IPO effects on the summary to summarize the domestic and foreign scholars before the IPO effect research ideas and methods, on this basis to find out this paper's own research methods, and on the basis of previous research experience, the mechanism of the effect of corporate governance on IPO effect analysis, for the following research provide theoretical basis.The third part:the overview of the performance of the enterprises of small and medium-sized board after IPO. Firstly, this part overview the SME board in China, and then to discuss the performance of China's SME Board Listed Companies in the IPO after the decline in performance to elaborate in different years, different industries, different natures of the companies and company management layer is holding shares of the company.The fourth part:the empirical analysis of the existence of IPO effect in China's SME board. This part is to verify the existence of the IPO effect or not of China's SME board by statistical analysis, including compare the financial indicators'changes between before and after IPO to verify the existence of the IPO effect in SME board and compare the operating performance between the managers' Shareholding group sample companies and non- managers' Shareholding group sample companies in the years before the IPO?the year when IPO and the years after IPO.The fifth part:the empirical analysis of the impact factors of the IPO effect of SME board based on the perspective of corporate governance. This part choose the proportion of the first major shareholders, whether the managers of the company holds the shares of the company, the chairman of the board is the general manager or not and other factors of corporate governance to analysis their impact on IPO effect by cross-sectional regression model, and join the company size, the company's type of industry and other variables as control variables.The sixth part:this part is the conclusion of this paper and policy recommendations, and the further research expectation.By empirical analysis, this paper concludes these following conclusions:(1) IPO effect exist in China's small and medium-sized board. Regardless the empirical analysis of all samples, or managerial ownership group samples or non-managerial ownership group samples, we can find:IPO effect exist in China's small and medium-sized board. The overall operating performance of enterprises of SME board after IPO is lower than that before IPO. The margin of sale, earnings per share, return on net assets, the main business income growth rate, total assets turnover, total asset growth rate after IPO decreased significantly, and the test results are significant; the asset-liability ratio after is lower than that before IPO, indicating that the solvency after IPO is better than that before IPO, the reason is the listed Corporation improve its solvency by raising a lot of money by IPO, the study also found that after IPO the asset-liability ratio is significantly increased year by year. (2) The managerial ownership group samples'operating performance is obviously superior to or non-managerial ownership group samples' operating performance in the years before IPO, the year when IPO and the years after IPO, and this advantage is more obvious in the years after IPO.(3) The proportion of the first major shareholders, whether the managers of the company holds the shares of the company, chairman of the board is the general manager or not, the nature of the company, the company is belongs to material manufacturing industry or not, the IPO year is 2005,2007 and 2011 significantly impact the IPO effect. The regression analysis results showed that, the proportion of the first major shareholders, whether the managers of the company holds the shares of the company, the nature of the company are negative correlate to IPO effect; the chairman of the board is the general manager or not, the company is belongs to material manufacturing industry, the IPO year is 2005, 2007 and 2011 are positive correlate to IPO effect.The innovation of this paper is the choice of the timeliness of the sample, the explanatory variables and control variables. This paper choose the companies listed in the SME board in 2004-2011 as the research sample, makes the research more timeliness; in the selection of explanatory variables, this paper choose the proportion of the first major shareholders, whether the managers of the company holds the shares of the company, the chairman of the board is the general manager or not and other factors of corporate governance to analysis their impact on IPO effect. in the selection of control variables, in addition to the company's type of industry and other variables, this paper select the natural logarithm of total assets as control variables, and join the year when IPO to control the effect of the year.This research still has some shortcomings:the first is only choose seven financial index, there are still other financial index that can reflect the operating performance of the company are not considered; the second is this paper research the influence of the first major shareholders holding company shares proportion on IPO effect, but the influence of the specific interval of the first largest shareholder's shares on IPO effect is not further researched; the third is this paper only studies whether the managers holds the shares of the company has a negative impact on IPO effect, without further study of the influence of the proportion of the managers' shares on IPO effect.