Study On The Market Effect And Influencing Factors Of Large Shareholder's Reduction Of Holding Stocks Under The Conditions Of Full Circulation

After China's reform of share splitting, the nonnegotiable shares of listed companies in our country can to be circulated on the secondary market, and then stock market gradually becomes full circulation. With the listing of shares, the function of large shareholders of listed companied to maximize their own value has changed. Large shareholder pays more attention to stock's price. Under this context, the large shareholder's tunneling has new forms and new vectors. One of that is reduction of holding stocks.First, this paper analysis the tunnel theory and the relationship between large shareholder's reduction of holding stocks and tunnel, and then proposed theoretically that the large shareholder's reduction of holding stocks is a new model of tunnel. Based on the theoretical analysis, the paper uses the way of event study to empirical study of large shareholder's reduction of holding stocks. The result show that, before the reduction of holding stocks and during the reduction of holding stocks(before the reduction of holding stocks announcement day), there is significantly positive excess rate of return, inversely, after reduction of holding stocks(after the reduction of holding stocks announcement day)the positive excess rate of return is disappears.According to the result about study tunnel theory on the influencing factors to the degree of tunneling, this paper also study the influencing factors of excess rate of return, the result is that, equity restriction ratio, the large shareholder's proportion of floating stocks and asset-liability ratio are significantly impact the excess rate of return, but the independence of board of directors is not significantly impact the excess rate of return.. Last, according to the conclusion of the final paper submitted the relevant policy recommendations which to be used promote large shareholder's reduction of holding stocks in the condition of fair and impartial. For example, Rich the channels of reduction of holding stocks, Strict information disclosure, Establishing and perfecting the law of large shareholder's reduction of holding stocks, Well exert the board's balancing role, Perfect the system of independent and Promote the system of professional managers.