Research On Behavior Of Equity Financine Of Listed Companies In China

Achievement gained from securities business in China plays important role in the development of national economy over ten years. Nevertheless, at present, with keen consciousness of trapping money and thinking much of raising capital but little of utilizing, listed companies seriously affects their quality, so it is urge to systemically study their behavior of equity financing, and discuss the approach to regulating theirs. On the base of the theory of financing on Modern Corporation, this paper reviews the transitionary course of financing system from the view of history, analyses the system background around listed companies in China, which is regarded as the logic beginning to study. By horizontal and vertical contrast, this paper discloses the important reason that distorts their behavior is that the cost of equity financing is underestimated. Under the special background of transitional economy in China, however, the cost of equity financing of listed companies, besides the general explicit cost, also contains rather high implicit cost, which covers the real expense paid by listed companies, and makes it difficult for capital market to exert the function of allocating resource at full. Furthermore, low cost induces credit lack of listed companies and becomes the new bottleneck that limits them development. The credit is in essence a kind of system arrangement, this paper analyses the current credit of listed companies in China, and raises the practices to strengthen their credit management.Efficiency of equity financing is the direct embodiment from behavior of listedcompanies. By the method of data envelopment analysis (DEA), this paper synthetically evaluates the efficiency of equity financing of 47 listed companies which are initially public offered in 1998 in Shanghai stock exchange market, and the result is that efficiency of equity financing about 68.09 percent listed companies can' t reach both technical and scale efficiency, that about 59. 57 percent can' t doieither technical or scale efficiency, so efficiency of equity financing is low in all. At the same time this paper finds the improving directions ,of the inefficient decision making units by projection analysis, and raises the way to increasing efficiency of equity financing. Achievement of listed companies is not good, especially the poor efficiency in utilizing capital, their descending ability in earning profit, which affects efficiency of the whole group, whereas the main reason of low efficiency is the problem of equity structure resulted from ill-defined property rights, therefore, it is necessary to build proper multi-equity structure and relevant corresponding system from the view of their sustainable development, so as to guide behavior of equity financing of listed companies in China.