China's Listed Companies Financing The Non-rational Behavior Research

Listed companies use various financing methods to raise funds and invest in projects with high returns. This, on the micro level, helps the companies to maximize their value and brings economic returns to their investors and stockholders. On the macro level, this accelerates the flow of capital into industries with higher returns, optimize the allocation of resources and improve the efficiency of the whole economy. This can explain why financing of listed companies is a hot topic in corporate financing.The new-type and transforming capital market in China has many unique characteristics compared to the traditional and mature capital markets. There are many things in Chinese listed companies that are different with or even against to the traditional financing theories, like the keen preference of equity financing, the choice of financing timing, reverse method to decide the financing scale, fake information to be listed, frequent changes in the process, intendance to over finance and the management of surplus. Therefore, we can not use traditional corporate financing theories to explain these characteristics.Behavioral Finance analyzes financial and economic problems from a new perspective. Since the Limited Rationality Hypothesis of Behavioral Finance could better follow the real situation of financial and economic market than the complete rationality hypothesis of the traditional finance theories, it could more effectively explain many phenomena. In terms of a comprehensive analysis towards each behavioral subjects - listed company's share holders, company decision makers, securities market brokers' institution, and government auditors and controllers, with the strong impact on the listed companies' financing that are resulted from subjects' irrational behaviors, it shows that applying behavioral finance theory will best explain the various phenomenon in financing our country's listed companies at current phase. The author conducts the psychological analysis about the majority shareholders' behavior, builds the majority shareholder's value model and also further analyzes the irrational behavior of directors, CEOs, investors, intermediaries and regulators to find how their behaviors affect Chinese listed companies' financing decision.In addition, when we are unveiling the mask of the participants' irrational behaviors and void-market during the financing procedure, we see the flaws existing under the hidden system, and organism. Some are the flaws in listed company's share option's structures; some are the flaws in listed company's administering systems; some are the flaws in capital market system and organism; some are the flaws in capital market monitoring policy. In terms of the further analysis towards flaws in hidden system and organism, we clearly understand the nature of various problems in our country's stock listed companies. Such an analysis will be to our interests to propose a root political suggestions and advices.