Research On The Private Placement, Ownership Structure And Investment Effciency

The private placement in a foreign country, also known as "private", is a way of se asoned equity offerings to specific investors. The changes of ownership structure after se asoned equity offerings determine the changes of control rights between stakeholders and the operators, which have an impact on the company’s goals and behavior. Investment d ecision-making is the starting point of corporate financial decisions, important foundation and motivation of company growth and increasing wealth. It will directly affect the com pany’s financing behavior and dividend policy and thereby affect the company’s operating risk and profitability. This paper directs the event of private placement. The investment efficiency measures from the angle of investment scale and diversification. The paper stu dies on the relationship between ownership structure and investment efficiency and builds a framework of analysis for the study of the private placement, ownership structure and efficiency of investment.This paper uses a combination of normative and empirical methods. Based on the lit erature review, the related theory and research status through normative methods, the paper theoretically analyses the mechanism of changes of ownership structure after the private placement and ownership structure on investment efficiency of listing corporation. The s eparation of two rights, the proportion of institutional investors and equity balance degree influence investment efficiency by using data to carry out empirical analysis. The paper finally draws a conclusion. Specific research logic can be divided into the following par ts:The first part is including the related literature at home and abroad, mainly involves the basic theory, background, present situation and the problems.The second part:the theoretical analysis. Starting from the three routes of ownership structure change, the paper analyses the impact of ownership structure on investment eff iciency in detail. The first route:The equity of listed companies will be more concentrat ed after the issuance of new shares to major shareholders and related shareholders. Agen cy conflicts increase between controlling shareholder and minority shareholders. But the 1 arge shareholders’ expropriation costs are very low. In this case, the controlling sharehold ers have an incentive to carry out transfer of benefits, which will lead to reduce investm ent efficiency. The second route:Compared with non private placement companies, the pr oportion of institutional investors after the private placement increases significantly. The r ole they play in corporate governance is significantly stronger than non private placement. Institutional investors will supervise tunnelling behavior of largeshareholders, which will i ncrease investment efficiency. The third routes:compared with non private placement co mpany, equity balance degree after private placement increases, which can inhibit the tran sfer of benefits of large shareholders, while also increasing the friction between the share holders. This makes listed companies decision-making behavior inefficient and weakes cor porate governance effect on other shareholders. Equity balances on the corporate governan ce effect is not significant, because equity balance on corporate governance has two aspe cts of positive and negative effect.The third part:the empirical analysis. The paper analyses from three aspects:Firstly, The paper pursues his studies about the private placement, ownership structure and over investment and uses Richardson (2006) model to calculate investment efficiency. Theoreti cally the paper uses dynamic modeling approach and empirically uses a random effects model based on the balanced panel. This paper studies ownership structure has an impact on over-investment for private placement and non private placement company by compa rative analysis Secondly, the study of private placement% ownership structure and corporat e diversification:To measure investment efficiency from the investment structure is based on sub-industry herfindahl and entropy index to measure the degree of diversification. T his paper studies ownership structure has an impact on diversification for private placeme nt and non private placement company by comparative analysis. Thirdly, the study of pri vate placement and investment efficiency:The paper carries out a comparative analysis o f investment efficiency by using Richardson (2006) residuals measurement models before and after three years of private placement.Simultaneously the papers carry out a compar ative analysis of different objects after three years of private placement in order to analy sis whether there are significant differences and the reasons for the differences.This paper is based on the research status of scholars at home and abroad and has made creative exploration in the research angle. Firstly, scholars at home and abroad stu dy the impact of ownership structure on the investment efficiency from the entire market and few scholars study corporate governance issues of private placement. It is important for optimizing ownership structure of listed companies and suppressing tunneling behavi or of large shareholders. Secondly, scholars at home and abroad mainly focused on analy sis of earnings management, stock reduction after the private placement, high dividends, r elated party transactions in tunneling behavior of private placement problem.however, In efficient investment of private placement has not been studied. As the investment efficien cy are closely linked to performance of listed companies and shareholders’ wealth, multi-angle, more comprehensive study investment efficiency of private placement is crucial. T hirdly, the target of investment efficiency has a multi-level and comprehensive. Scholars at home and abroad are based on the entire market for empirical research on the invest ment efficiency. The main investment is a measure of over-or under-investment from the scale of investment with the one-sidedness.This paper combines the scale of investment with investment structures from fully comprehensive analysis of the problem.The paper can provide us with internal mechanism of the corresponding relations bet ween ownership structure and corporate investment and provide reasonable basis for estab lishing effective corporate governance structure. In addition, combining ownership structur e with investment behavior, this will guide the investment decisions more scientific and s tandard. The paper provide a practical path and measures for optimizing ownership struct ure of private placement, reducing information asymmetry and agency costs and improvin g investment efficiency. Secondly the research will not only provide policy support for p olicy authorities to develop policies to improve the investment decisions of listed compan ies, but also provide policy guidance for supervising investment behavior of listed compa nies and protecting the interests of small investors...