The Impact Of Internal Governance Structure Of GEM Listed Companies On Violations

Since the establishment of the GEM in 2009,China’s small and medium-sized enterprises,high-tech enterprises have gained a lot of development opportunities,but also provide a broader soil for the breeding of violations.Due to the low threshold and low requirements for the listing of the GEM,many companies with insufficient qualifications have chosen the GEM market.These companies are still immature and perfect in many aspects.There are many risk factors,and it is more prone to related violations such as market fraud,financial data fraud,and incomplete information disclosure.Violations have become an important issue hindering the further development of listed companies on the GEM,which not only affects the overall order of the GEM market,but also affects the smooth and healthy operation of China’s securities market.The fundamental reason for the violations of enterprises is that the internal governance structure of listed companies on the GEM is unreasonable.Therefore,it is of practical significance to explore the impact of the internal governance structure of listed companies in the GEM on their violations.This paper analyzes the current situation of China’s GEM listed companies,analyzes the problems existing in the internal governance structure,and proposes solutions to the violations of GEM listed companies.Based on the relevant theories of corporate governance structure and relevant literature and research on violations,this paper analyzes the domestic and international literature and understands the views of different scholars on the relationship between corporate governance structure and violations.The content includes three analytical perspectives.They are the structure of the board of directors,the structure of the shareholding structure and the salary structure,and analyze the influence degree of different influencing factors on the research content.After that,this paper introduces the development status of China’s GEM listed companies.China’s Growth Enterprise Market has developed rapidly since its establishment in 2009.As of October 31,2018,a total of 739 companies were listed on the GEM.However,while the rapid development,the GEM market has its own problems,including Low listing standards,concentrated industry distribution,and mismatched ownership structure.According to the analysis of the data,the governance structure of the GEM market has a certain gap compared with the overall level.Moreover,the occurrence of violations is also very different from the overall market violation.Unstable.Next,this paper analyzes and discusses the theories needed for the research content.The theories related to the analysis of the correlation between corporate governance structure and irregular behavior include the following four: information asymmetry theory,effective market theory and noise theory,stakeholder theory,The principal-agent theory briefly summarizes each theory,and combines the theory and the particularity of the GEM market to propose the research hypothesis of this paper.This paper selects companies listed on the GEM before December 31,2012.The data from 2013 to 2017 is selected as a sample,and the two companies with IPO termination and delisting are excluded.There are 1770 sample data of 354 enterprises.In the regression model,because the variable selected by the explanatory variable adopts a binary variable such as “whether it is illegal or not”,the regression model selects the probit model,and there are four explanatory variables: the proportion of the board of directors,the number of board members,and the top ten stocks.The shareholding ratio of major shareholders and high compensation of directors and supervisors;there are two control variables: total assets and asset-liability ratio.Descriptive statistics were first performed on the sample data,and the overall situation of the sample was described.Then the correlation test was carried out and it was found that there was no obvious correlation between the variables.The probit model regression analysis showed that the different explanatory variables were significantly different at different significance levels.The regression results showed that:(1)the shareholding ratio of the board of directors was negatively related to whether the listed companies on the GEM were in violation of regulations;(2)the size of the board of directors(3)Whether the shareholding ratio of the top ten shareholders of tradable shares is negatively related to whether the GEM listed companies violate the regulations;(4)Whether the high compensation of the directors and the GEM listed companies are in violation of regulations relationship.According to the regression results,this paper puts forward concrete and feasible suggestions for China’s GEM listed companies,including stricter control of the number of directors,establishing a long-term effective equity incentive system for directors,and increasing the shareholding ratio of the fourth to tenth tradable shareholders.It must meet the company’s development level and so on.However,due to the author’s own academic level and limited personal energy,this paper has some shortcomings:(1)no detailed analysis of the composition of the board of directors;(2)relatively simple selection of control variables;(3)no consideration of the lag of the announcement of violations.By optimizing the internal governance structure of listed companies on the GEM,the development prospects of China’s GEM market will become better and better.On the basis of further improvement of the IPO system and the delisting system of the information disclosure system in the GEM market,the violations will gradually The land will be reduced and the market environment will be healthier.