Based On St Shell Resource Value Restructuring Performance Research

Capital restructuring has always been a heated topic of the capital market in all countries. Ever since the fifth wave of mergers and acquisitions in the U.S., scholars began to study restructuring more deeply and comprehensively. China has a history of capital market for decades, capital restructuring developed gradually, from some random trials to standardized operations with large scales. In the mean time, the Chinese economy is in the stage of economic transition, and all aspects of the Chinese economy such as social and economic development, reforms of state-owned enterprises, and adjustments of social and economic structures, are related to restructuring. Therefore, researches on capital restructures are important both theoretically and practically. The stock system reform in China started from the dual stock system, under which shares are divided into two categories, tradable shares and non-tradable shares. State-owned shares and corporate shares cannot be traded on the secondary market, so they are called non-tradable shares. Non-tradable shares account for a large proportion of all shares. Therefore, it was difficult for firms to be listed or delisted from the market, pushing up the shell resource values of listed firms, which has influences on the efficient distribution of capital market resources. In1998. ST system was implemented. The ST system regulates the implementation of Special Treatment and Particular Transfer, and strengthened delisting executions in China. In order to keep advantageous resources, ST companies began to restructure, so that firm operation can be improved and the ST designations can be deleted. What are the influences of capital restructuring with high frequency on firm performance? Can firms’profits be raised? What is its implications for other government policies related to the capital market? Based on these questions, this paper carries out empirical studies to investigate the effects of restructuring on ST firms’ performance.Following existing literature, the paper selected a subsample from ST firms listed on the Shanghai and Shenzhen A-Market which finished restructuring in2007. I used methods of event analysis, financial statement analysis, and grey relative analysis to study capital restructuring of ST firms. Empirical results show that capital restructuring has significant positive effects on firm performance in the short run. However, its long term influences are disappointing. Besides, capital restructuring has diversified effects on firms of different restructuring types as well.