Research On The Effect Of Executives' Reduction Behavior For The Value Of GEM Companies

2017 is the ninth year of China's formal launch of the GEM.Since the lifting of the first batch of stocks,the reduction holdings behavior of the GEM executives has attracted the attention of all sectors of society.Domestic and foreign scholars have also conducted research on this.This article discusses the internal connection between executives' reduction behaviors and corporate value,and combines theoretical and empirical methods to reveal the influence of executives' reduction behaviors on the value of the company.On the whole,whether in the long-term or in the short-term,the reduction of holdings by the GEM executives has a negative impact on the value of the company,and compared with shorter-term reductions,the long-term reduction of holdings has a greater negative impact on the value of the company.Then,this paper discusses the relationship between the reduction of holdings of the GEM board and the value of the company from three dimensions: reducing the holding motive,reducing the holding scale and reducing the holding price.In the reduction holding motives,whether it is long-term or short-term,compared to the reduction of speculative motives,the reduction of liquidity motives has a significant negative effect on the value of the company,and the long-term reduction motive has a greater impact on corporate value than the short-term motive.Obviously,from the point of view of reduction in scale,in the short term,the scale of reduction has a “U” type effect on the value of the company.When the scale of reduction is small,the value of the company will decline as the scale of reduction increases.When the scale of reduction is large,the value of the company will rise with the increase in the scale of reduction,but in the long run,the scale of reduction does not have a significant and continuous impact on the value of the company.From the perspective of executives reducing their holding prices,short-term executive holdings of prices have a positive impact on corporate value,the higher the reduction in transaction prices,the higher the value of the company,but from a long-term perspective,reducing the price has not significant impact on corporate value.In view of the fact that there is indeed a close link between executive deductions and corporate value,the government should strengthen its legislative work in this area and improve the supervision mechanism.Investors should learn to rationally consider the reduction behavior of executives,and companies should formulate more effective rules and regulations to manage the reduction behavior of executives to promote the sustainable and healthy development of the company.