Research On The Financial Performance Of Corporate Restructuring

In recent years, Restructuring and Reorganization activities of listed companies in China are increasing rapidly, and have become the focus of the security market. Although western scholars have done a lot of studies on this subject and developed some mature research approaches and conclusions, the security market of our country is still at developing stage, and corporate restructurings are quite different from those in western countries, so their conclusions do not necessarily apply to China. Quantitative researches on corporate restructurings in China are not so many as qualitative researches, which focus on the listed companies during 1997 to 2000. There are few studies on restructuring activities in 2001 during which the market environment has changed a lot.The purpose of this paper is to find out the characteristics of corporate restructuring and reorganizations under the background of strengthened supervision and improved accounting standards in 2001. Using financial data on Chinese public firms that had performed restructurings in 2001, this paper studies the impact of restructuring activities on firms' performance. It finds that performance of sample companies are better than the market average both before and after restructuring, but financial ratios does not improve obviously, what's more, the ROE ratios even drop generally, which are very different from the characteristics during the past few years. This paper is organized into seven chapters.The first chapter is the introduction of the background and purpose of this paper. The second chapter introduces the definition and classification of restructuring and reorganization used in this paper. In the third chapter we discuss the accounting problems related to various corporate restructurings. Following is the analysis of environment in security market during 2001 and its probable impact on corporate restructuring activities. The fifth chapter reviews and evaluates domestic and international researches on the impact of corporate restructurings. In the sixth chapter, we perform analysis of corporate restructurings on Shanghai security market in 2001, and compare the financial effects in different periods. The last chapter is the conclusion of this paper and some further discussions.