Study On The Firm's Motivation,Cost And Its Economic Consequence Of Switching Board In China NEEQ

China has basically formed a multi-level capital market structure,which formed by the main-board market,small and medium enterprise board,the growth enterprise market,the NEEQ and the regional equity trading market.However,due to the lack of organic contact between different markets and levels,the efficiency of the capital market hasn't been fully developed.Reasonable system of switching board can effectively connect various markets and levels,improve the efficiency of resource allocation and promote the further development of capital market.However,China hasn't established a perfect system of switching board at present,the NEEQ stratification mechanism also just begin and firms in the process of switching board also face many problems,such as too single mode of switching board,long time and high cost spent during switching board and lacking of supporting transaction system and legal system.Promoting firms switch from the NEEQ to the growth enterprise market is an important step to further improve China's capital market system and deepen the reform of the growth enterprise market.Since the establishment of the NEEQ,the system of switching board has been a hot topic in circles of theory and practice.Now,the number of firms in the NEEQ is more than ten thousand.The NEEQ plays an important role in the early stage of the small and medium-sized firms,but because of the NEEQ has problems such as inadequate liquidity and poor financing environment,it is hard for the NEEQ to satisfy the firms' higher requirement for financing and further development.In this case,switching to higher markets will become an important way for firms' further development.In 2017,with the acceleration of IPO audit speed,the enthusiasm of firms in the NEEQ to switch to higher level market is quite high,more and more firams have applied for IPO.Improving the system of switching board and helping high-quality firms switching to the higher capital market successfully will help the firms' development and growth.The system of switching board is the key of the connection between capital market's different levels,which affects the development of the NEEQ on the one hand and concerns the development of the whole capital market on the other hand.Predictably,with the system of switching board deepening gradually,the correlation between different markets will strengthen,then,the information asymmetry in the capital markets will reduce and the efficiency of resource allocation will improve.Due to the system of switching board is still not perfect,the empirical research about switching board is limited.Through the case analysis of the firm which has switched board successful,ean provide a certain reference for firms in the NEEQ,therefore,the analysis has strong practical significance.And by combining relevant theories and market practices,this paper can provide some Suggestions for the design of the NEEQ's system of switching board.Under this background,this paper,in case of SOJO Electric which has switched to the growth enterprise market from the NEEQ in 2015,reviewed of the SOJO Electric's process of switching board briefly at first,then analyzed the firm's motivation of switching board from the Angles of development and financing needs and analyzed the firm's cost of switching board from two aspects of capital cost and time cost.Finally,this paper analyzed the economic consequences of switching board from the aspects of stock liquidity,capital stock and financial performance and put forward some countermeasures at last.By analyzing the case of SOJO Electric,the paper found that the motivation of switching board is mainly due to the unsatisfactory development demand and financing demand.At the same time,excessive cost will hinder the firms' initiative of switching board.Switching to higher board can effectively improve the firms' stock liquidity,enhance the firms' solvency and growth ability.Based on these conclusions,this paper argues that the small and medium-sized firms should adhere to the development and innovation,constantly improve their own competitiveness,strengthen the standards of corporate governance,perfect the system of information disclosure,at the same time,realize their own stage of development and don't make the decision of switching board blindly.And the government should also promote the internal delamination in the NEEQ,perfect the market hierarchy structure,raise the level of market liquidity and the efficiency of price discovery,gradually establish and improve the system of switching board,clear the NEEQ's orientation,strengthen the regulation during the matter and afterwards,consummate the system of downgrading board and delisting synchronously.