Research On Market Effect Of The Reform Of Shareholder Right Splitting

Shareholder right splitting is the most serious institutional defect of China's capital market.It destroyed common interests' foundations of all the shareholders of listed companies, anddistorted the allocating function of stock resources of capital market, which resulted in the lossof inherent sustainable motivation of China's capital market. To actively boost the reform ofshareholder right splitting was the most significant, complex and urgent task faced by China'scapital market in 2006. The historic significance of the reform of shareholder right splitting is torestrict systems of institutional restructuring of China's capital market, which could almost bementioned in the same breath to the setting-up of the capital market in the early 1990s.At present, the reform of shareholder right splitting is drawing to the end. It is verynecessary to objectively understand this historical event. And it also has great significance toanalyze the long-term effects that the reform brought to the security market.This paper gave a general introduction of the historical origin, the course of drawback andthe process of the reform. Based on that, the paper made a preliminary discussion about thereform of shareholder right splitting from the economic point of view. Then, it empiricallyresearched the market effect in terms of the reform of shareholder right splitting with the help ofEvent Study Methodology, and analyzed the long-term effects that the reform of shareholderright splitting brought to the security market.