An Empirical Analysis Of The Effects Of Convertible Bonds On The Corporate Performance Of Listed Companies

The convertible bond, which has the dual characteristics of the stocks and bonds, has developed more than 100 years in foreign countries. The convertible bonds has already become a common an mature financial tools in international capital market.The convertible bonds market has been gradually developed in China since be starting in 1990's.Domestic scholars are paying more attention to the research on the convertible bond. The studies mainly focused on financial motives, effects on short-term stock price, Theoretical Advantages of the Financing, the methods of pricing and the problems in items. Although the market system of convertible bonds has also been studied, the results of the research are old and unsuitable with the current economic market.This thesis is based on the perspective of the financing of listed companies. This paper introduces the background and the significance of the research, research state. Based on the concept and nature of the convertible bonds, we expounded the mechanism of the effects on the performance of listed companies. In this paper, I analyzed the effects on the performances of 39 companies listed on Shanghai share market and Shenzhen share market who issue convertible bonds to finance from 2003 to2007. I have done a factor analysis by 8 financial indicators which can well represent the corporate performance of the listed companies. Then I have done a Wilcoxon signed-rank test of the changes between one year before issuing and one year after issuing. After that, I analyzed the causes of empirical conclusions and proposed some suggestions to promote the development of the convertible bonds. Finally this paper pointed out some of the limitations and the direction of research in the future.