China's Listed Companies Commissioned By The Impact Of The Financial Scale Factors

Marked with the founding of Shanghai & Shenzhen Stock Exchange in 1991, China's Stock market started to run formally. After over 20 year's rapid development, stock market has improved gradually with functions of resource allocation are remarkably strengthened, and has become a necessary factor in the development of China's economic today. The number and quality, the investment products and scale, the investors' number of listed companies in stock market have increased largely, especially from the new bull market in 2005, which has promoted the investment concept and scale to a high level. During the development of stock market, there comes out many new fields and products, among which entrust financing is one of the most important field not only largely exists in ordinary investors but also in many listed companies. Unjust behaviors spouted throughout entrust financing of listed companies as it began since 1996 , depositary are mainly stock companies , with problems frequently came out, this had made great loss to listed companies that joined in the entrust financing. Related requirements in announcement, most kinds of entrust financing are not known by people, as a result, loss can't be proven either. The bull market in 1999-2000(that is "5.19"market) has made a relatively advantageous market environment for the entrust financing of listed companies, entrust financing began to run in many listed companies, and made good on the earnings. However, the bear market in the next half year of 2001 and CSRC's (China's Securities Regulatory Commission) strict supervision to entrust financing of listed companies , faults were exposed gradually, which made great loss to listed companies that took part in the entrust financing, entrust financing experienced a turning point, scale came down. But entrust financing didn't disappear; it has been keeping a certain scale. As the stock market became hot again since 2005, entrust financing came to a new stage of development. Many listed companies began to do entrust financing with large amount of money through different ways, the financing scale became largely, risk also increased correspondently.As a field of financing or investment, many researches of entrust financing proves the values of listed companies which do harm to the profits of stockholders. Stock regulator and related government departments strengthen the supervision and limits to listed companies, but the phenomenon of entrust financing still exists. This is because the listed companies have strong motion and hope to join into the a low effective way of investment-entrust financing, from which management and controlling shareholder will maximize their profits, it is an inevitable way for listed companies to do entrust financing. There are different ways to cool entrust financing, like reducing motions of management of listed companies, increasing costs of entrust financing and enhancing supervision, etc. This paper holds the view that it's a practicable way to reduce the scale and influence of entrust financing to listed companies. Listed companies have different affected factors for financing scale in and out of companies, and the inner factor plays a decisive role. This paper researches on company's inner factor to entrust financing scale based on above view.It's only 10 years or so from the beginning of entrust financing of listed companies till now, a new field still. Academia, industry, and finance supervision departments take the entrust financing still as a controversial issue, without an authoritative and unified conclusion, related researches are scattered, lacking of systematic and definitive conclusion. This paper makes a research on the phenomenon of entrust financing of listed companies with quantitative analysis on the trust relationships within company, points out factors of financing scale which may be affected by listed company.Combining with the above discussion and current situation of entrust financing of listed company, this paper puts forward some suggestions to the regulatory system today.