The Research Of The Relationship Between The Holistic Of Group Company Of China And Company Performance

In segmental listing mode, there is diverse and complicated relationship between the listed company and its group company and its related companies. The indivisibility of the the industrial chain between the Group company and listed company forms a large number of related transactions, may also lead horizontal competition between Group companies and listed companies and may affect the control right of Group company. The existence of the related transactions could become a mean that listed companies use to transfer the interests to Group companies. The related transactions will not only damage the interests of medium and small shareholders, but also will lead to the decline in the performance of listed companies; the horizontal competition between Group companies and listed companies will consume the competitiveness of Group companies and listed companies; weak control of the listed companies will also lose the support of major shareholders; and these ultimately affect the healthy development of China's security market. Holistic listing of Group company cuts off the chain where Group company uses the related transactions to plunder the interests of the listed company. Holistic listing of Group company is conducive to reduce the related transactions between Group companies and listed companies, to avoid the horizontal competition between Group companies and listed companies and also to enhance the control of listed companies. Therefore, Holistic listing of Group company plays significant role in improving the quality of listed companies and promoting the healthy development of security market.The paper uses the theory of related transactions to research the relationship between the holistic listing of Group company and company performance, and gets a conclusion that holistic listing of Group company can reduce the related transactions between Group companies and listed companies, thereby enhance the performance of listed companies. The paper notes, the holistic listing of Group company will enable the indurstrial chain between Group Companies and listed companies to link more closely, to reduce the related transactions between Group companies and listed companies and cuts off the chain where Group company uses the related transactions to plunder the interests of the listed company, and therefor enhance the the performance of listed companies after holistic listing.The paper uses the theory of the horizontal competition to research the relationship between the holistic listing of Group company and company performance, and gets a conclusion that holistic listing of Group company can avoid the problem of the horizontal competition between Group companies and listed companies and thereby enhance the performance of listed companies. The paper notes, the holistic listing of Group company can eliminate the horizontal competition, get the effect of scale and synergy and reduce operating costs, and therefor enhance the the performance of listed companies after holistic listing.The paper uses the control right theory to research the relationship between the holistic listing of Group company and company performance, and gets a conclusion that holistic listing of Group company can consolidate the control right of major shareholders and thereby improve the performance of listed companies. The paper notes, the holistic listing of Group company can optimize the equity structure of listed companies, consolidate the control right of major shareholders, strengthen the support of major shareholders, reduce the possibility that major shareholders use related transactions to tunnel listed companies, and therefor enhance the the performance of listed companies after holistic listing.Empirically, the paper tests the relationship between the holistic listing of Group company and company performance.Compared to domestic scholars' studies,which only include the theoretical and case analysis of 1 holistic listing of Group company,the paper has innovation on research method. Through the statistical analysis of the related transactions before and after the holistic listing of Group company, the paper finds that, compared to the year just before holistic listing of Group company, the number and the amount of related transactions of the year following holistic listing of Group company are significantly reduced. Using holistic listing data of China's security market, the paper has an empirical analysis of announcement effect of holistic listing announcement. Single-variable analysis shows that, the secondary market investors have positive innormal cumulative return, and highly significant statistically. After adding control variables, the analysis shows that, the secondary market investors have positive innormal cumulative return, but not significant statistically. The reason may be that the sample is small. The empirical results support the conclusion of theoretical analysis.