An Empirical Study On Operating Performance Of Dually-listed Companies In China

In recent year, China's capital market has witnessed rapid development. In the maturing process of development, the management of China's capital market carried out a bold reform. After the completion of the reform of the A-share market, the existing problems of the B-share market have caused more and more scholars and investors' concern. The problems of the B-share market are the problems left over from the history of China's capital market. With the growing amount of QFII and the liberalization of individual investors to invest in the B-share market, the importance and irreplaceable of the original purpose of B-share market's "to attract foreign capital" has been greatly reduced. B-share companies have gradually been marginalized, and urgently need reform.In the current 109 listed companies which issued B-share, the amount of the companies which are AB dually-listed is 86, accounting for more than one half. If properly solving the problem of the B-share in AB-share dually-listed companies, the reform of the B-share market has completed the vast majority. Therefore, I choice the AB-share dually-listed companies as the starting point to research the problem of the B-share market. In the empirical research, I selected 32 dually-listed companies as the test samples, which achieved dual listing between early 1996 to the end of 2001 in the Shanghai and Shenzhen stock market, to research the long-term variation of their operating performance after dual listing. I chose the ROA,ROE and EPS as the indicates to reflect the operating performance. There are four parts in my empirical analysis: (1) The variation trend of the operating performance from the previous year to the subsequent five-year of the dual listing of the test samples. (2) The comparison of the decline of the operating performance between the test samples and control group which only issued A-share. (3) The comparison of the decline of the operating performance between the dually-listed companies which have high-proportion B-share and low-proportion B-share. (4) The impact of different listing mode to the decline of the operating performance of the dually-listed companies. I chose the median as the eigenvalue to describe the operating performance. First, I calculated the median of all the indicators from the precious year to the later five years of the dual listing. Then I calculated the variation of the medians between the base year and later five years to their previous year. In addition, to reflect the cumulative variation in the past few years, I calculated the median variation between the base year and later five years to the previous year of the dual listing. I use the method of two-tailed Wilcoxon signed-rank test to test the significance of the median variation.The results of the empirical research showed that, after the dual listing the operating performance was decreasing every year. The decline of the operating performance of the control group which had similar assets' scale and in the similar industries is less obvious than that of the test samples. It also showed that the decline of the operating performance of the high B-share proportion test samples is more obvious than that of the low B-share proportion test samples. In addition, the different listing mode made a big difference to the operating performance. On the base of the conclusion, I presented some proposals to improve the operating performance of the dually-listed companies, as well as I made some of my views on the future development of the B-share market.