An Empirical Study: The Impact Of Cross-holding On Profit Of Listed Companies

Since liaoning cheng da and gf securities cross holding in 1999, many listed companies are engaged in it these years. As the development of the Chinese economic reform,the society and the academia pay much attention to this phenomena and the problem derived. The new corporation accounting standard issued in 2006 and implementation of the share split reform,which will change the valuation of equity investment,and will bring the opportunity of revaluation on the assets of listed companies.this thesis study on the impact of cross-holding on the listed companies' profit,aim at providing a reference proposal to the security supervision and investors.The study in this thesis follows such path: First, introducing the purpose and Methods of this research mainly and studies the current research both at home and abroad; Second,disscusing the definition and the theory of the cross-holding,then combining with the cross-holding status at home and abroad,making a theoretical analysis of issues of the cross-holding;Third, introducing the design of the research, this study use the Paired Samples Test approach, Wilcoxon Signed Ranks Test approach and Sign Test approach, we adopt the data of all companies listed on the Shanghai stock market over the period 2005 through 2007 to be samples, Analyse the difference of the profitability between the two samples;Fourth, it's an empirical study on the impact of cross-holding on the profit of the Chinese listed companies, study the difference on the earning stability,profitability,and financial structure between the two group of samples;Fifth, conduct the conclusion,and give some suggestion on the cross-holding.The empirical findings of this study can be summarized as follows:First,the earning stability of the cross-holding listed companies below the non crossholding companies, These sample firms show a larger proportion of non-operating gains summarized from their income.Second,under the conditions of the same industry and same size,there are no difference between the profitability of the two group of samples.Third,under the conditions of the same industry and same size,there are no difference between the rate of assets and liabilities of the two group of samples.