A Study On The Impact Of Reform Of Equity Division On Performance Of The Listed Company

Historical changes-Equity Division Reform took place in China securities market on May 9,2005,which makes state-owned shares,corporate shares and other non-tradable shares to be able to successfully circulate in the securities market.By taking reform,corporate can readjust their structure,rationally allocate resources to maximize the corporate value as well as the shareholder interests.To find out the impact of reform of equity division on performance of the listed company,this paper selected several financial performance indicators,using factor analysis to make comprehensive assessments based on the corporate performance before and after equity division reform,finally I got these following conclusions:(1)From 2004 to 2007,the average comprehensive performance scores of the listed companies characterized a J curve-initially falls,but then rises rapidly;(2)The average comprehensive performance scores of ST stock and Non-ST stock showed a significant deviation from each other;(3)After equity division reform(2006),the average comprehensive performance scores in majority industries had a great rise than that of previous year(2005),but the score in 2007 was less than in 2006;(4)The higher the concentration ratio,the more improvement in corporate financial performance after equity division reform;(5)After equity division reform, company whose actual controllers are state-owned or foreign shareholders,its proportion of holding share was positive correlation with its performance,while company whose actual controllers are university,its proportion of holding share was negative correlation with its performance.The innovations of this paper lie in:(1)The studies about how China equity division reform exerts an impact on corporate performance are rare,this paper pay more attention to this aspect;(2)This paper collected four year's financial data from 2004 to 2007,only by large quantity of computing and summarizing can we study fully;(3)Most previous reviews tended to use Tobin Q,EVA and other individual financial indicator,this paper adopted eight financial indicators in factor analysis, and got four public factor,and computed comprehensive scores on corporate performance.This paper developed the theories of equity structure and corporate performance, which would have a symbolic meaning in assessing the role of equity division reform played,meanwhile,the conclusions of this paper also provide a strong policy guidance to further improve the corporate performance after equity division reform.