Research On Finance Efficiency Of Enterprises Listed On NEEQ

With the advancement of the reform process, Chinese SMEs plays an increasingly important role, especially in promoting economic growth, alleviate employment pressure and promoting technological innovation. However, due to various objective and subjective reasons, it is difficult for SMEs to obtain external financial support, the difficulties in financing have been concerned by academia and government, to provide convenience for SMEs'access to equity financing, the government actively promoting the construction of multi-level capital market, the NEEQ has built in 2013 for formal SMEs over the country, SMEs can finance by issuing equities based on their needs, and investors will trade their shares listed on the NEEQ.The NEEQ is still in its early stage of development, and it may not function efficiently at much time. For example of the financing function, there still are many companies never issue equities for financing, and the companies which has offering equities are extremely polarized. By the end of 2015, there are more than 5 thousand of companies listed on NEEQ, but the top ten companies account for 30% of the total financing in the market, JIUDING CAPITAL financing scale alone accounts for 10%, and some of the companies did not put the capital into the production and business operation, but for market speculation. Therefore, I am curious that if the companies improved their business after getting the financing resources.Reviewing existed literatures researching on finance efficiency, I found that domestic scholars are particularly concerned in the issue while foreigner researchers just make little research about this. The research methods are various, mainly include regression analysis, fuzzy analytical method, entropy evaluation method and DEA method (data envelopment analysis method), and DEA method is most frequently used to assess efficiency problems. The object of research covers main board listed companies, small and medium-sized board, GEM, and NEEQ. Most of the research result shows that the enterprise finance efficiency is quiet low.In this paper, I will use DEA method to analyst the finance efficiency of companies listed on NEEQ, based the output results of the method, I will compare if the efficiency has changed after a company offering equities in privately, and find out that efficiencies between the companies which have offered equities and which not are different.The first part is the introduction that illustrates the background and significance of this paper, and discusses the role that SMEs play in the macroeconomic, reveals the financing difficulties faced by SMEs.The second chapter reviews literature about finance efficiency, explains the concept of finance efficiency, summarizes the influence factors of enterprise financing efficiency, finally classifies the results of the empirical research on the enterprises' financing efficiency.The third chapter introduces condition of NEEQ, include the companies listed on board, transaction, stock insurance, mergers and acquisitions. The NEEQ has indeed made significant breakthroughs after it expanded its scope at 2013. Indicators that have increased exponentially at 2015 show the market is booming. Then I discuss the influence that NEEQ make on the Construction of multi-level capital market. SMEs listed on the board can finance by offering stock, and will improve their market supervision and governance within the enterprise. However, there are a lot of problems behind the frenzied growth, one is that the SMEs are of varying quality that some need improves, the second is that the poor market illiquidity impedes the price finding, the third is that function of financing is not sound and corporate financing situations exist polarization.Chapter four represents the research methods and research data. The section describes the principles and characteristics of DEA models, which will be able to model the the decision-making unit (ie the individual companies) efficiency and output the direction and value that each index could improve where the unit is not efficient. Referring to the existing research, I selected two input indicators and three output indicators:operating income, net profit, operating cost, debt, ownership interest.The fifth part is the empirical results and analysis of the causes. In this section, I analyzed the output of DEA model, compared the difference of finance efficiency before and after offering stock in privately. The result shows that the efficiency is the same at the year of offering. Wilcoxon test result of efficiency of before and after offering shows that the comprehensive efficiency and scale efficiency have been promoted significantly after offering. Then, I contrast the efficiency of sample group (those have issued stock two years ago) to the control group (those never issued stock at market), I find that the efficiency, especially the scale efficiency, of sample group is higer than the control group. The part then analyzes the causes of inefficiency, the output of DEA model shows that differences of ownership interest between two group are the mainly causes of efficiency otherness. A further analysis shows that companies should enhance their growth rate and optimize capital structure to promote the finance efficiency.The last part is conclusions and policy recommendations. This section summarizes the context of the above and makes the conclusions. According the conclusions, I put forward several policy recommendations. SMEs should make a financing plan based on their conditions to avoid over-financing, and they would better to try to improve staff quality and corporate governance, maybe they should choose a reasonable way to optimize the capital structure. NEEQ then is ought to wide financing channels for SMEs and enhance service levels, and it can promote the market liquidity so as to price finding function could work. Furthermore, government agencies should strengthen market supervision and enact relevant laws and regulations that constraint behavior of SMEs effectively.The innovation and contribution of this paper reflect on:first, the existing studies are mostly based on domestic A-share listed companies, but I select 43 companies listed on NEEQ, which have offering stock in privately at 2013. Secondly, the methods used to research on finance efficiency of companies listed on NEEQ in other literatures are too simple to make an accuracy result, I contrast the sample group to control group, and before to after offering of sample companies, based on the output of DEA model, so that the empirical results more persuasive. Additionally, according to the empirical results of the analysis, this article finds out the inefficient possible causes, and it is targeted to give policy advice from several levels.