An Empirical Research On The Market Effect Of Share Selling Of The Major Shareholders And Its Influence On The Operating Performance For The Listed Firms In China

The Stock Shares have been sorted to two classes in China's Stock Market since 20th Century 90's:those which are on exchange and those which can't.The Split Share Structure is an Institutional Obstacle that twists the interest between the two kinds of Shareholders and blocks the Operating Performance of the Listed Companies.Split Share Reform will break the difference between the two kinds of Shares gradually which will change the situation of too Concentrated Equity Structure and too less Equity Balance.So it makes sense to analyze the Market Effect of the Share Selling of the Major Shareholders after the Non-tradable Shares can be on exchange,Study whether the Operating Performance of the Listed Companies is Improved after the Share Selling of the Major Shareholders and whether the Change of the Equity Structure Works.There are five parts in the Paper as follows:The first part Introduces the Background of the Paper,the Idea of the Study and the Framework;the second part is the Theoretical Study,to Review the Theory of Delegation & Corporate Governance and Summary the Study of others,as well as the Sense of the Split Share Reform;the third part Introduces the Idea of the Study involved the Sample Selection and the Data Resource,and so on;the forth part Analyzes the Case Study Result;the last part Summarizes the Conclusion and makes the Outlook of the Study.In the Case Study,during the first part,the Paper collects relevant Data from a Sample of the Listed companies that conduct Share Selling of the Major Shareholders from January 2007 to July 2008,using the Event-study Methodology,the Paper Studies the Market Effect of Share Selling of the Major Shareholders:during the second part,the Paper Collects relevant Data from a Sample of the Listed Firms that conduct Share Selling of the Major Shareholders in 2007,using the Principal Components Analysis to Study its Influence on the Operating Performance of the Targeted Companies,what is more,using the Regression,the Paper also Studies whether the change of the Equity Structure after Share Selling of the Major Shareholders Works to the Operating Performance of the Target Companies. Through both Theoretical and Case Study,we find that the Share Selling of the Major Shareholders does not bring Negative Weather to the Stock Market Significantly;after the Share Selling of the Major Shareholders the Operating Performance of the Listed Companies is Improved to some extent,but not Significantly,On the Contrary,the Value of the Shareholders is damaged Significantly;what is more,after the Share Selling of the Major Shareholders,the Equity Structure is Distributed Slightly,but the Major Stockholders still Dominant in the Equity Structure,Simultaneously the Institutional Investors make sense for the Operating Performance of the Listed Companies and Stability of the Stock Market.To make the Equity Structure more reasonable,Improve the Corporate Governance & the Operating Performance of the Listed Companies,the Listed Companies should disperse the Shares to some extent and make a better Balance between the Major Stockholders and the Minority Shareholders,what is more,it makes sense to Develop Mature Institutional Investors.And it is also very important for the Firms to Manage its Finance Strategy after the Share Selling of the Major Shareholders to Improve its Operating Performance.