| Share participation is a kind of commonly used investment strategy in Chinese Stock Market. But according to the market behavior in recent years, the application of this method in listed companies'resource collocation is far from rational. Also the absence of strict supervision further debases the validity of share participation investment. This thesis based on the actual condition of Chinese market probes into the validity of shareholding investment strategy, aiming at figuring out some way to help listed companies realize better resource collocation and stronger core competence.This thesis begins at retrospection of researches conducted by Chinese and foreign scholars and introducing the defination and classification of share participation. Based on the different investment motivation, shareholding investment can be classified into two general sorts. One is financial share participation, emphysizing the short-term investment yield, and the other is strategic shareholding, emphysizing the long-term investment yield. The character of the former one is the short investment period and the low share participation proportion, while the later one's is the long investment period and the high share participation proportion. The strategic share participation comes into effect through its influence on the invested board, the mechanism of which is relatively more complex. According to the strategic investment theory and history of merger, it can be further broke down into three small types, that is, vertical share participation, horizontal share participation, and irrelevant share participation. Different motivation in share participation leads to its different influence in companies'operating performance.After the valid classification of all the share participation, this thesis reviews the status quo of its development in Chinese market. Statistical results reflect that compared to strategic share participation, financial participation is more common, and companies inclination toward it changes with the market period. Within strategic shareholding, it is more common for companies to conduct irrelavant shareholding, which seems irrational. Besides there is large difference among industries in many aspects, such as share participation type and willingness to conduct such investment, which tallies with the lifecycle theory.And then, the thesis enters the most important part, a thorough analysis on the validity of share participation by means of demonstration. The first issue to figure out is whether share participation influences companies'operation performance or not. It turns out that the validity is different between financial and strategic share pariticipation although the sample as a whole is distinctly influenced. Companies should be cautious of financial share participation due to its unclear effect in descending period despite its obvious promoting effect in bull market. As for the strategic share participation, its positive influence on companies operation performance is more obvious when its motivation for long-term investment yield is stronger. The second issue to figure out is mainly about how to raise the validity of strategic share participation. Both the ingredient and regression analysis show that share participation type is highly related with operating performance, while the influence of share participation proportion is not clear.Finally the thesis abstracts some opinion from the statistics and demonstration. First of all, the key to raise the share participation validity is to enhance its influence on the invested company. It would be a good idea to conduct cross shareholding only if the financial and law system are better constructed. Second, having a better understanding about the industry lifecycle would serve to form a better share participation strategy in aspects such as shareholding type. The last but not least, it is always the best time to prepare for strategic share participation when the market is in its bad time. |
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