China's Listed Companies, Equity Refinancing Aggregation Effect And Its Causes

Equity refinancing means the financing methods that listed companies use to raise fund after IPO, including Rights Issue, Seasoned Earnings Offering (SEO), and Convertible Bonds. This paper begins with the introduction to the development about the policies and financing amounts of the 3 different financing channels and finds that there exists a clustering effect of the "offering upsurge" and "financing channel selection upsurge" in China's stock market.Chapter 3 tries to demonstrate the genesis of the clustering effect by constructing the factors that may have impact on companies' financing decision, including the company's real needs of fund, external environment (market timing and policy changes), the controlling shareholders' tunneling intention, and the managers' conformity behavior. The feedback and reinforce function of the parties concerned lead to the forming mechanism of the clustering effect.Then, this paper presents a clustering model which successfully proves the existence of the "offering upsurge" and "financing channels selection upsurge" by calculating the equity refinancing market clustering index since 1990s.Chapter 5 empirically analyses which factor leads to the clustering effect significantly. Analysis from the market angle shows market opportunity and policy are significantly related with the market clustering index. While the analysis from the company angle shows that internal financing needs, market opportunity, and results of conformity behavior affect the financing decisions significantly; but the changes of policy and deceiving financing are not the real reasons based on the total sample.More important conclusions are found based on sample segments: (1)in the upsurge periods companies tend to be affected by market opportunities and conformity behavior much more than in other periods; (2) regulation policies in 1998-2001 affected the financing decisions significantly; and (3) the equity refinancing behaviors are more motivated by the needs of deceiving financing.Finally, Chapter 6 gives some recommendations based on the former research.