The Performance Study Of Chinese Small And Medium-Size Enterprises Before And After Shareholding System Reform

Our country has opened to the outside world since 1978, after the thirty years reformation, China has got outstanding achievements on national economy, the medium-sized and small enterprises have also contributed many strength. As the reform and openness going deeper, the proportion of the medium-sized and small enterprises in national economy grows bigger. The health development of the medium-size and small enterprises now is related to our national economy developing speed and quality, they have already become essential strength for our national economy developing.The domestic and foreign state-owned enterprises have reformed through issuing shares to public, that makes state-owned enterprises got a new life , the performance have improved largely. After the large-scale reform of large state-owned enterprises, medium-sized and small enterprises of our country also had a shareholding reform, they hope to get out of the difficult position, expand the size and improve performance.This paper first uses the standard research methods to review the basic content of the shareholding system, introduces the current shareholding reform situation of small and medium-sized enterprises. Then take small and medium-size enterprises listed in stock market as sample, on the basis of collecting large amount of data, through the comparison of performance changes before and after shareholding reform in 38 small and medium-size enterprises listed in Shenzhen SME COMP. in 2004, we find shareholding reform increase profits and real sales in small and medium-size enterprises effectively, but it doesn't succeed in profitability and financial leverage. This is because the net profit doesn't increase the same amount as the real sales. These results are the same with the results of state-owned enterprise reform. In addition, the companies that having a signal person as the first major shareholder when listing got better performance than the companies that having other types of first major shareholder after shareholding reform, and the increase in real net profit and sales is more significant. Having a signal person as the first major shareholder is more beneficial for small and medium-size enterprises to improve sales profit rate, this is due to the changes of enterprise ownership structure and management system. The proportion of circulating shares accounting total shares and the change of earning ratio are significantly negative related after listed, that is because most of the shareholders are organizational and individual investors, they want to speculate in our national capital market. Their major purpose of having shares is to get capital gain, so they don't take much concern in corporate management. It's hard for them to play a relevant role in the company's governance through shareholders' general meeting.