Does Private Equity Benefit Neeq Market?

The NEEQ market is the core of Chinese OTC market,provides financing platform for a large number of small and medium-sized enterprises.Since NEEQ market expand to the whole country in 2014,the number of listed companies has exceeded quickly,by the end of 2016 has exceed ten thousand.The hot NEEQ market also provides a platform for private equity to invest companies which listed in NEEQ market.Private equity participate in listed companies,not only bring a lot of money to solve their financing constraints,but also provide guidance for technical and management level.As the two important components of multi-level capital market in China,the interaction between them has also aroused widespread concern in academic area.One of the most direct correlation is that private equity to invest companies which listed in NEEQ,what would happen for their growth since PE participated?What impact will it have on business performance and liquidity?This paper studies the of NEEQ market and private equity fund located in Chinese city distribution,discuss the positive interaction between them promote the construction of multi-level capital market.Then through the research companies listed in NEEQ market in 2013 and 2014,whether they attract private equity,the number of private equity joined them,and the proportion of holdings in listed companies by private equity.Empirical analysis the impact of performance and liquidity of listed companies caused by private equity.Empirical results shows that corporate performance not improving significantly after PE joined,even will produce negative effects.The number of PE and the holding ratio by PE is larger,the negative effect will be more significant.The paper also divides the samples into state-owned enterprises and non state-owned enterprises,found that private equity investment will not significant impact the performance of state-owned enterprises,but have a significant negative impact on non state-owned enterprises.Then,we studies the influence of private equity investment for corporate liquidity,results show that private equity joined it,the number of PE participant,the share of holding by private equity will have a significant positive impact to improve the liquidity of enterprises.Actually,private equity does not benefit the enterprises in performance,only have positive influence on the equity liquidity of the enterprises.The innovation and content of this paper:we based on previous research for private equity in the main board,small and medium board and GEM,we further study the effect of private equity for corporate performance and liquidity of companies listed in the NEEQ market.Then,we discusses the interaction of the NEEQ market,the private equity and multi-level capital market.