Research On Equity Financing Performance Of Listed Companies Of China

In china, lack of fund is a heavy problem for many listed companies. However, the effect of using money is not expectative. So with a view to listed companies' financing performance, and considering the conflict between blockholders and small stockholders, this paper analyzes the problem of poor financing performance from aspects of the preference of stock financing, ownership structure, tunneling, and financing constraints. This paper explores and renews the domestic stock financing theory in practice and in theory.Firstly, starting with the motivation of stock financing, this paper analyzes the relationship between issued stock quantity and the controlling stockholder's interests, and net assets per share, between the controlling proportion and the controlling stockholders interests, and issued stock quantity, respectively. As a result, this paper explain why China listed companies have the preference of stock financing and also confirms the borderline of stock financing on the condition that controlling stockholders get best benefits without losing their control rights.Secondly, with data of IPO firms that have raise money by issuing stock, this paper investigates the relationship among ownership structure, tunneling behavior and corporate performance. This paper has empirically proved that there is an endogenetic relationship between tunneling behavior and corporate performance, which develops the tunneling theory. At the same time, relative to prior opinions that there is a U-shape or reversed U-shape or linear relation between ownership structure and corporate performance, this paper exactly discloses the cubic relationship between ownership structure and corporate performance. Furthermore, this paper discloses the cubic relationship between ownership structure and tunneling. So this paper proves tunneling is an important channel through which ownership structure has effect on corporate performance.Thirdly, with the practice of the financing policy ignoring liquidity of firm, this paper examines the relationship between the investment-cash flow sensitivity and the degree of financing constraints of listed firms, and the result indicates that the investment-cash flow sensitivity of listed firms can't be used to measure the degree of financing constraints. Moreover, this paper initially explores the relationship between the cash-cash flow sensitivity and financing constraints with data of A-share listed companies, and finds that cash-cash flow sensitivities can reflect whether a company is financially constrained. So this paper enriches the theory of financing constraints.Finally, with the case of MingXing Electric Power Co. Ltd aggrieved by its largest shareholder, this paper analyzes the relationships among ownership structure, tunneling behavior, outside monitoring and corporate performance, and provides a practical evidence supporting above theory.