An Analysis On Cross-shareholdings Among Listed Companies

Presently, it is popular that cross-shareholdings among listed companies. As the stock index booms repeatedly, those listed companies taking part in cross-shareholdings appear expanded market value. With such a hot investment atmosphere, whether cross-shareholding system shows its advantage to listed companies and how the market responses to it is an important support to government, who has responsibility to adopt measure on leading those cross-shareholding companies. As cross-shareholdings playing a key role in the whole security market and having much to do with the stability of China's capital market, it is necessary to consider how to lead cross-shareholding companies. Once the government has a proper control on the cross-shareholding phenomenon, it will be conductive to value discovery. To a certain extent, it can improve the listed companies' external investment condition, so as to prevent wicked merger and acquisition. Meanwhile, those listed companies taking part in cross-shareholdings can strengthen effective supervision each other to make their own administrate construction be perfect, keep order of security market, moreover, promote security market's healthy development. But, if government does not take action to lead it scientifically, the phenomenon of cross-shareholdings will also show its disadvantages. Such as controlling their stock market value together, driving up stock value wantonly, triggering unreal capital addition, making insider trading and so on. So, in order to lead cross-shareholdings make significant contribution and avoid disadvantages to the capital market, it is necessary to analyze its cause, economic background compare its superior and inferior, and do positive analysis on it. In this way , we can get meaningful conclusion, then we can make feasible suggestions to lead cross-shareholdings scientifically and make it standard.This paper looks back on studies on cross-shareholdings home and abroad. Based on it, we introduces what is cross-shareholdings and how it can be classified, in addition, we analysis how it generate and whether it does good to companies. Finally, combining with different economy conditions, we draw a comparison between countries and districts in the world. For that cross-shareholdings appears later than other countries, studies at home is not very deep-going. Studies at home are mostly aimed at differences on law and systems, some others analyze it from accounting viewpoints. But little are devote to economic studies. This paper determines to have a conclusion from samples in Shenzhen Securities that whether cross-shareholding system show its advantage to listed companies and how the market response to it, so as to provide reference to our government.