The Influence Of Internal Capital Market Operation On Chinese Listed Companies Seasoned Equity Offerings Efficiency

From the perspective of finance,a listed company in both the choice of financing or investment has a goal to improve its operating performance,thereby increasing its market value.But China's unique political and economic environment leads to a mixture of many non-efficient factors other than the usual core objective of listed companies to maximize the value their own,resulting in the inefficient use of funds raised by seasoned equity offerings(SEO).The factors of China's special political and economic environment that influence listed companies' financing behavior include:financial repression environment, universal group control,high proportion of ownership of government and weak protection by law.Universal group control formulates a typical organizing system of listed companies in China,which determines that the vast majority of listed companies are facing not only external capital market but also an internal capital in the group when they invest and finance.Financial repression raises the needs of controlling group to transport benefit through internal capital markets(ICM).Weak protection by law also provides convenience for such acts.This paper firstly analyzes evolution of SEO policy in China,considering that listed companies' re-financing behavior is deeply influenced by policy.An analysis of historical data also reflects this characteristic.Secondly,it descriptively analyze on the value efficiency of listed companies' SEO in China,finding out a declining operating performance after financing.Thirdly,it in-depth studies the complicated relationship of the interested parties and related institutional background,and find that ICM of listed companies have a significant impact on its financing behavior.Finally,by adopting indicators measuring the functioning of the ICM directly,it makes positive analysis of a large sample statistical test on the relationship between the ICM operations and the SEO efficiency of listed companies.And it verifies that the operation of ICM is one of the important reasons of the low SEO value efficiency in China's listed companies.