Research On The Financing Mode Choice Of GEM Listed Companies

The establishment of GEM has promoted the development of entrepreneurial high-tech SMEs,lowered the threshold of listing for innovative SMEs,and vastly optimized the financing environment for SMEs.Since the establishment of GEM listed companies that pay attention to "high technology and high growth",it has caught the attention of the bulk of investors,and company management has put much more of a focus on the rational choice of financing methods.However,GEM companies often have difficulty raising sufficient funds in their business activities,mainly because of their short listing time and inadequate internal governance mechanisms,which cause them to continue to face financing constraints.Based on this,the paper combines the financing constraints of GEM listed companies with financing decisions,takes the effect of financing constraints on the choice of financing methods as an entry point,and explores the features of financing options of GEM listed companies,in order to provide suggestions for the financing decisions of GEM listed companies.This paper adopts a combination of theoretical and empirical evidence.The article is designed to study the issue of financing constraints and financing options for GEM listed companies.Firstly,we find the breakthrough of this article by collating and summarizing the relevant literature studies of scholars at home and abroad,and set forth the research ideas and methods.Secondly,this paper summarizes the modern financing theories,and then analyzes the financing status of companies to offer the theoretical foundations for the empirical study of this paper.Then we use the 459 GEM companies listed before 2016 as the study population.We select a total of 2,295 annual financial data of these companies from 2016 to 2020 as our observation sample.Then we construct a cash-cash flow sensitivity model.The role of this model is to test the existence of financing constraints in GEM listed companies.Subsequently,this paper empirically investigates the influencing mechanism of financing constraints on the choice of financing means through the Ordered-Probit model.Finally,this paper provides suggestions for rationalizing the choosing of financing means for GEM listed companies from the perspective of GEM listed companies,securities market and government.The results of research show that financing constraints generally exist in China’s GEM listed companies and that financing constraints have a significant effect on the choice of corporate financing methods.The higher the degree of financing constraints a firm faces,the more a firm’s choice of financing method follows the pecking order theory.The higher the degree of financing constraints a firm faces,the more inclined it is to choose internal financing.While in external financing,companies will give priority to short-term debt financing methods,followed by consideration to choose long-term debt financing methods,and finally choose equity financing methods.