Study On Impacts Of NEEQ Internal Stratification Policy On Financial Distress Risk

To solve the quality discrepancy and liquidity shortage of NEEQ market,NEEQ applied internal stratification policy.There are three standards that NEEQ requires enterprises in innovation layer to match.The existence of standards makes the process of internal stratification exactly similar to the IPO process.To maximize their own profit,management tends to apply adverse selections such as earning management,hiding information and inefficient investment.Adverse selections finally raise the risks of financial destress.Institutional investors play an important force in the corporate governance and inhibit the adverse selections of management.But institutional investors differ in their motivations and abilities,so they will play different roles.Then,does the internal stratification policy have adverse effect on the risk of financial distress of listed enterprises?What role did institutional investors play in this process?These problems will be studied in this paper.This paper choses listed enterprises which been listed before December 31th,2014 as sample.Finally,paper draws behalf conclusions:1.NEEQ internal stratification policy raises the risk of the enterprise financial distress of the first stratification entering the innovation layer.2.Institutional investors have the risk of reducing the financial distress of enterprises;3.The existence of institutional investors lower the risk fluctuation of financial distress;4.There are differences in the effect of the change of the financial risk of enterprises entering the innovation layer in the first stratification.5.The impact of the internal stratification on financial distress is gradually exposed,and the influence is gradually strengthened over time.