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A Study On Financing Behavior And Its Influencing Factors Of Chinese Listed Companies

Posted on:2017-03-22Degree:DoctorType:Dissertation
Country:ChinaCandidate:J Y LouFull Text:PDF
GTID:1109330488471718Subject:Finance
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Regulatory policies have a great impact on financial behavior of listed companies, and the research focus on this impact has a huge practical significance and policy implications. Regulatory policies firstly affect the availability of finance or the threshold of finance, and then affect the financial behavior to achieve the goal of finance. More importantly, studying the impact of regulatory policies can be useful, at least, in two aspects:on the one hand, it can discover the financial behavior of listed companies to adapt to or cater to the regulatory policies; on the other hand, it also can inspect the effectiveness of the regulatory policies, which can provide more detail microscopic evidence to regulators. Three topics will be discussed in this thesis:firstly, the impact of monetary policy on debt financing behaviors which includes the selectivity of debt maturity, liquidity risk and the substitutional relation among the way of debt financing; Secondly, the impact of the semi-mandatory dividend policy on the financial behaviors of rights issue and seasoned equity offering which include the earnings management behavior and the payment of cash dividends; Thirdly, the impact of the policies of private placement on the financial behaviors of private placement which include the market timing, issue discount and tunneling.Monetary policy exercises a great influence on debt financing, and is well-documented. However two areas of this topic, which are the long-term debt maturity structure and the alternative relation among the way of debt financing, have been seldom concerned in China. Using panel regression model, two-stage least squares method (2SLS), difference-in-differences model (DID), and logit model, several results has been discovered. Firstly, from 2002 to 2014 the importance of long-term debt has increased significantly. On the one hand, the ratio of long-term loan to total bank loan has increased significantly, and has gradually surpassed the ratio of short-term loan. On the other hand, the ratio of long-term debt to total debt is stable, but the ratio of long-term debt due after three years to long-term debt has increased monotonously. Besides that, the private enterprises do not be discriminated with respect to the amount of bank loan, but the ability to get long-term loan is weaker than state-owned companies. Secondly, trade credit represents the buyer’s market theory based on property right, which means that state-owned companies get more trade credit than private companies. When it comes to the monetary policy, trade credit represents alternative financing theory in the tight monetary policy, and buyer’s market theory in the loose monetary policy. Thirdly, the alternative relation among the ways of debt financing is another crucial area of this part. The empirical evidence indicates that short-term loan can be the alternative financing of long-term loan due to its advantage of cost. Trade credit is more important for private companies. The trade credit should be the alternative financing of short-term loan and long-term loan for the long term capital demand in the loose monetary policy.Equity financing is the important way of refinancing for listed companies, but right issue and seasoned equity offering suffer the equity refinancing supervision and semi-mandatory dividend policy. Chapter 5 sets the "Decisions on Amending Some Provisions on Cash Dividends by Listed Companies" (hereinafter referred to as "the Decisions") released in 2008 as the policy background, and researches the influence of cash dividend threshold on the refinancing companies’ earnings management behavior. The Decisions firstly affects listed companies’ dividend policies, and then affects their earnings management behavior. By extending the gaming model of Fan(2007), and using panel regression model, logit model and propensity score matching(PSM), The empirical evidence indicates that "the high-quality refinancing companies" tend to carry out negative earnings management to reduce the payment level of cash dividends and signal quality. However, the "ordinary-quality refinancing companies" have to cater to the earnings threshold by positive earnings management without increasing cash dividends payment. Furthermore, investors prefer the negative earnings management to positive earnings management. The empirical results of PSM indicate that "the Decisions" generates the passive motivation for the high-quality refinancing companies (treatment group) to pay dividends. That is to say, the treatment group’s dividends payment close to the threshold and lower than control group. The ordinary-quality refinancing companies (treatment group) are encouraged to inflate income, and proceed to do higher positive earnings management than the control group of ordinary-quality refinancing companies. However the level of dividends payment of ordinary-quality refinancing companies does not increase due to the weak income. That is to say, the difficulty of catering to refinancing supervision has increased.Private placement is another important equity refinancing way, and is the most welcomed way for listed companies in China. Based on the regulations and status quo which are the manipulation of pricing benchmark, non-market price issue and Approval System, this thesis will further research the impact of regulations on the financial behavior of private placement. The issue cycle of Chinese listed companies usually has two market timing and one approval cycle. The pre-announcement market timing will be affected by market sentiment. Both outside investors and larger shareholders will seldom take part in the private placement when the market sentiment is high. The larger shareholders prefer asset to cash to invest private placement if the market sentiment is high. During the initial of bull market, outside investor will be more likely attracted to invest the private placement due to the information asymmetry. However, during the bear market the larger shareholders will more likely to invest due to the private information of companies’ value. Approval cycle is mainly determined by China Securities Regulatory Commission (CSRC). The CSRC will approve more applications of private placement during the bull market, which manually increases the approval cycle of private placement. The issue market timing is the timing after approval. A large number of companies will quickly issue shares when the market sentiment is high to catch the timing. The larger shareholders do not care about issue market timing due to their low benchmark price, and aspire to issue shares as soon as possible due to the longer restricted period. The change of market sentiment will also affect the behaviors of tunneling. The larger shareholders prefer cash to asset to invest when the market sentiment is low, and get discounts as larger as possible. However, the way of tunneling will change when market sentiment is high. More specifically, the high market sentiment will inflate the price of asset, and then the larger shareholders tend to use asset to invest.
Keywords/Search Tags:financial behavior, monetary policy, semi-mandatory dividend policy, the policy of private placement
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