Research On Capital Injection And The Listed Lompany's Performance

In 2005, China began to carry out share-splitting reform, non-tradable shares can be traded in stock market after paying the price to the tradable shareholders, than our market goes into circulation age. The smooth progress of share-splitting reform in China has laid a solid foundation for healthful development of the stock market. Meanwhile, the share splitting reform of the listed companies had a profound impact on the value orientation and behavior of major shareholders. Ability of allocating the resources will be increasingly strengthened in, the capital market, which will promote capitalization of the high-quality assets into the capital market. Equity injection has become an important way of capitalization of the resources. However, new assets can create value for the company? What factors can affect the performance of the company's market? What is the motivation of major shareholder who injected their assets into the listed companies? These are the important issues of being worth researching at the present stage of the developing capital market in China.Background of share-splitting reform in this paper, we use the M & A theory to comprehensively research the effect of major shareholders's capital injection from two aspects of financial performance and market performance.In the study, we researched the impaction of the transactions characteristics of major shareholders's capital injection to listed company's financial performance by standard empirical analysis. In addition, we compared the differences of the short-term market performance and long-term market performance of capital injection when we considered the effect of the ownership structure or we don't consider it.The dissertation contains the introduction part and seven chapters, the basic content of the chapters as follows: Chapterâ… introducts the background and significance, the scope of study and the defining of concepts, research tools and methods, the framework and maincontents, the innovation and the research necessary to do further in the future.Chapterâ…¡, This chapter researched the theoretical basis of this articles ownership theory,agency theory,contract theory, and evaluated these theories. In the literature review, we classified these documents from the motive of he capital injection,the factors of the performance,the methods of research, we expected that the conclusion of these studies are used for further study.Chapterâ…¢, this chapter analyzed the ownership structure of features, and researched characteristics of major shareholder's behavior and decision-making mechanism of listed companies in China. Finally, we elaborated major shareholder's behavior from the motivation of capital injection,the style of capital injection and regulate to major shareholder's behavior.Chapterâ…£, by constructing a theoretical model,we proved that the gap between the asset's value reported and the true value is larger, the wealth of minority shareholders will losed more, the wealth of major shareholders will be inflated as the value of assets increasing artficially.Chapterâ…¤, from the transaction characteristics of the capital injection, we researched the impact of capital injection to company financial performance by th method of Wilcoxon rank sum test and principal component analysis, and through analysis to these financial performance,we study the impact of capital injection to company operational efficiency,the ability of learn and innovation profitability and the company's growth.Chapterâ…µ,through the event study method, we analyzed the impact of capital injection to short-term market performance from the different characteristics of the company capital injection, combined with ownership structure theory, comparative different impact of capital injection betweem considered the ownership structure and don't considered it.Chapterâ…¶, through the event study method, we analyzed the impact of capital injection to long-term market performance from the different characteristics of the company capital injection, combined with ownership structure theory, comparative different impact of capital injection betweem considered the ownership structure and don't considered it. Chapterâ…·, The conclusions reveals the impact of the capital injection of the major shareholderes to financial performance and market performance of listed companies, at the same time, this conclusion is also expected to provide decision-making for the supervision. Finally, the limitations of this article and the direction of future research are indicated.The results of the theoretical model of wealth effect show that major shareholder's capital injection have affect to the wealth of other shareholders and listed companies. In the company's financial indicators, this wealth effect will affect the return of the listed companies'net assets in short-term. The proportion of large shareholder's stake in the listed companies and the type of injected assets have duty for these short-term effects. The style of payment and the price paid for obtaining major shareholder's assets have effect to the return of listed companies' net assets in short-term, but it is weak than that of the proportion of large shareholder's stake and the type of injected assets. In addition, this wealth effect have affected accounts receivable turnover in the medium and long term. the performance of companies on the market is that, without considering the impact of ownership structure, different methods of payment will product significantly different the short-term market effects; after two years of the capital injection, company's market excess return will be increasing with the increasing proportion of large shareholder's stake and be reducing when major shareholders inject their physical assets into the listed companies. When we consider the impact of ownership structure, the listed companies bought the assets of large shareholder with the shares which have better market performance of then with the money; company's market excess return will be increasing with the increasing proportion of large shareholder's stake after one year of the capital injection,and be reducing with the increasing proportion of large shareholder's stake after two years of the capital injection;company's market excess return will be reducing after injected major shareholder's capital into the listed companies if paid with physical assets.