The Studies Of Equity Refinancing Performance Of China's Listed Companies

Financing is the starting point for enterprise funds. It is also the prerequisite of the enterprise's survival, development and profitability. There are two abnormities on the refinancing of China's listed companies:first, the firms do not follow the classical Pecking-order Theory, but have prejudice on the equity refinancing. Second, the equity refinancing performance of the companies is low. The abnormalities have been the focus of the theory and practice. For the existing of split share structure, the classical theories developed in the West can't give a rational interpretation for the abnormalities. The scholars in China do a lot of researches on the equity refinancing during the past years, but only a minority of the scholars consider the factor of the split share structure.And the researches do not give concrete theoretic and empirical studies on the direct relationship between the refinancing performance and the split share structure.1. The Research PurposeThe paper will give a systematic research on the equity refinancing behavior and refinancing performance before and after the split share structure reform. This paper will also induct the Market-timing Theory, base on the actual of China's stock market to study the equity refinancing of China's listed companies.2. Main Contents and ViewpointsChapterâ… , IntroductionThis chapter studies the background and significance of the paper, summarizes the research methods and contents, and defines the concept relating to the split share structure, financing prejudice and financing efficiency.Chapterâ…¡, Literature Reviewing and CommentThis chapter reviews the internal and external academicians'research results of financing prejudice and financing performance. First, introducing classical financing theory, including MM Theorem, Trade-off Theory, Pecking-order Theory and Market-timing Theory. External scholars create three ways to explain the announcement effect of refinancing, the Wealth-Redistribution Hypothesis, the Price-Pressure Hypothesis and the Information-Release Hypothesis. Internal scholars study focused on the ownership structure and financing costs. And the empirical studies show that the equity refinancing performance of the listed companies is low.Chapterâ…¢, Analysis on the causes of equity refinancing preference and performance of China's listed companiesThis chapter introduces the equity refinancing preference and its causes, and the equity refinancing performance of China's listed companies. Using charts to introduce the refinancing situation of China's listed companies between 1998 and 2008. Analyzing the preference shares from the split share structure factors, the market irrational factors and other factors of listed companies' refinance causes. Also analyzing the reasons for the low performance of refinancing through the split share structure and market-timing behavior of listed companies.Chapterâ…£, Empirical test and result analyzingThis chapter introduces the use of Microsoft Excel 2007 and SPSS 15.0 software samples for the events of empirical research testing process and results of empirical analysis and interpretation to the equity refinancing market performance before and after the split share structure reform.Basing on the theoretical explanations, choosing the data from 2002 to 2004 Financial Statements of 107 listed companies which carried out issuance of new shares or allotment of shares to test the relationship between equity refinancing market performance and ownership structure or market-timing behavior. Then, choosing the data from 2006 to 2008 Financial Statements of 58 listed companies which carried out issuance of new shares or allotment of shares to test the relationship between equity refinancing market performance and ownership structure or market-timing behavior. The results prove that there are no significant differences before and after the split share structure reform. Ownership structure and market-timing behavior both led to poor performance of refinancing.Chapterâ…¤, Research conclusions and policy suggestionsBasing on the theoretical explanations and empirical analysis, this chapter provides the suggestion to improve the equity refinancing behavior of China's listed companies and to enhance the refinancing performance in the situation of China's capital market.3. Main ContributionsA. The dissertation made a research of the relationship between refinancing performance and ownership structure on the background after the split share structure reform in China's capital market.B. The dissertation made a research of the relationship between refinancing performance and market-timing behavior in China's capital market. Offering a new study idea.