Empirical Analysis On The Strong Preference To Equity Financing Of China's Listed Information Technique Companies

Equity financing preference of public companies means they pursue IPO,Match and secondary offerings blindly. There are two specific performances. One is these public companies seek IPO before going public. Another is that they tend to choose match or other equity financing method in terms of financing ways. The research shows that all of the public companies have two characters of low-level asset-liability ratio equity financing preference. In China, because of the particularity of the industry of IT public companies, the phenomenon of equity financing preference is more significant. However, the large amount of equity financing has not promoted the development of performance or effectively improved the resource allocation. Therefore, this paper focus on the reasons of equity financing preference based on the samples of several IT public companies in China.In the aid of the study on equity financing preference home and aboard, this paper makes a comparison analysis of financing model between domestic IT public companies and aboard and propose the equity financing preference effects of IT public companies in China, then analyses the cause of formation. In the empirical part, we take the IT public companies who carried out equity financing in 2005 to 2009 of ShangHai and ShenZhen a-share market as our research object and analyse if from many angles as equity financing costs,ROSC,corporate growth,profitability,capital composition and company size. With the help of SPSS software, we firstly carry out the data analysis of equity financing preference degrees through analysing the index of IT public companies in China. Secondly, we analyse the significance of equity financing preference influencing factors of these companies through multivariate linear regression analysis.The first chapter introduces the research background and significance of equity financing preference of IT public companies in China and research method and the innovation and shortage.The second chapter reviews the relevant theories on enterprise financing home and aboard.The third chapter makes a comparison of financing mode between IT public companies home and aboard, then analyses the cause of equity financing preference of IT public companies in China.The fourth chapter makes a linear regression analysis based on the data of IT public companies from ShangHai and ShenZhen a-share market of 2005 to 2009 and analyses the influence that these affecting factors contribute to financing preference of IT public companies in China.The fifth chapter proposed related suggestion to improve the phenomenon of financing preference of IT public companies in China according to our empirical analysis result.From the empirical research, the percentage of Asset-liability ratio and leverage of capital structure of companies from sample is 25.62%and 93.10%individual. This result means the long-term capital of most of the IT public companies in China originate from equity financing. The percentage of 86% of equity financing in exogenous financing means that almost all of the exogenous financing have been used in the way of equity financing. Through regression analysis, we get following conclusion:the relationship between asset-liability ratio and equity financing preference is negative,the relationship between Company size and equity financing preference is negative,the relationship between main business growth and equity financing preference is negative,the relationship between ownership concentration and equity financing preference is positive,the relationship between financing costs and equity financing preference is not tigh,the relationship between net assets yield and equity financing preference is not tight.