A Study On The Reasons And Influence Factors Of Chinese Listed Companies' Equity Financing Preference

Since 1991, China established the Shanghai Stock Exchange, China's securities market has become the place of many state-owned enterprises place free funds, and the phenomenon of equity financing preference begin to appear. As China's stock market is immature, there is a lot of speculation. In the first day of IPO, it is not surprising that 80% of stock turnover, resulting in the prices of stock market "distortion". As the dual listed company shares, it is widespread that the major shareholders become the biggest stock. As the main state-owned enterprises don't have the real qualification, making Managers get a lot of benefits. Meanwhile, because China's securities market is imperfection, it is more serious of the preference shares of listed companies refinancing trend.In this paper, we compare with the latest data between foreign listed companies and general industrial enterprise, and compare with the average data between the implementation of our 2007 refinancing and all listed companies. Logically, it makes more stringent to point out the features of financing preference shares of listed companies in China, and point out the performance of listed companies in China. For the formation mechanism of financing preference shares in China's listed companies, in this paper, it is not as reasons to illustrate the problem from the individual, but study from Historical reasons, Direct causes, Internal factors, External causes and the relationship between the various causes. So it is more comprehensive to solve the reason of the equity financing preference in the listed companies in China. We get a comprehensive research and analysis with China's equity financing preference to conduct. First of all, we research on the existing theory both Domestic and foreign, finding the problem of the special equity refinancing preference in China.Secondly, it points out the characteristics of preferred equity financing by comparison of Chinese and Western Countries, and points out the disadvantages of China's economic development; Thirdly, using the theory of behavioral finance, it illustrates the causes of refinancing preference from the list: Historical reasons, Direct causes, Internal factors, and External causes, and it analysis of the factors of preferred equity financing from six point. Finally, we get the advice for the Policy recommendations, and make the financial structure of listed companies to standardize.