The Empirical Research Between Changing Of Raise Funds And Market Reaction

The listed companies access to the funds which are used to development themselves throughthe capital market, but many listed companies optionally altered investment of the raised fundsatfer accessing the raised funds. The kind of behavior in not fully rational and effective and it’s avery general phenomenon in Chinese capital market. The behavior directly affects the vitalinterests of investors and the healthy development of capital market. The behaviors in listedcompanies alter the investment in raised funds have five specific investment, alter to maininvestment, external investment, add liquidity, cash，debt.This article based on the five differentinvestment respectively study the relationship between the alteration and market reaction. Thenbased on the analysis of the result, we need to find out relevant regulatory policies.This paper expounds the system background and relevant theoretical foundation about thechange Of raised funds. For the present situation，characteristics and reasons in raised funds andchanging of listed company, we do the detailed descriptive statistical analysis. This paper usestheoretical analysis and empirical research. To analyze the market reaction about the five specificalterations, we adopt method of the empirical research. We come to the conclusion. For changingto MI, there is a significant negative effect in market reaction. For changing to FI，there is asignificant positive effect, the result in market is positive, but it’s not significant. For changing toAl, there is the same significant positive effect in performance and market reaction. For changingto CASH，the effect is not significant in them. For changing to D, the effect in performance is notsignificant, but in market reaction is significant negative effect.