Studies On The Motivation And Short-term Performance Of The IPO Companies’ Behavior Of Changing The Investment Project

The change behavior of investing direction in IPO Companies not only affects the use efficiency of the raised funds, but also has an important impact on the entire market order. In this paper, we study the phenomenon of changing investing direction in China’s listed companies. This article does a comprehensive and deep study of its motivation and impact of the short-term performance, and proposes the corresponding countermeasures and suggestions based on empirical findings.This article firstly points out the universality of China’s listed companies at this stage to change the investing direction with descriptive statistics analysis, and then, summarizes the reason for the change and reinvestment orientation through public announcement. Combined with relevant theory, including the theory of neoclassical economics, the transmission of information theory, agent cost theory and behavioral finance theory, this paper analyses the motivation of the change of investing direction. In empirical research, we use logistic regression to analyze the motivation of the change of investing direction, and analyze the short-term performance through the change of investing direction by multiple regression.The main conclusions:(1)The intense of market competition significantly positive relates with the change’s probability of the listed companies;(2) The decline in operating results adds the pressure for the management to change the investing direction;(3) The higher degree of ownership concentration, the lower degree of two power separation, the more likely to change investing direction;(4) Listed companies’change of investing direction has a positive impact on the companies’ short-term performance, but not significantly help their ability to grow.The conclusions of empirical studies further demonstrated that myopic loss aversion in behavioral finance theory that the management of the listed company for the myopic loss aversion make change decisions in order to raise short-term performance but not too much take the company’s ability to grow in to consideration. Such investment behavior of the management may be due to the defects of the policy, so in the end of this article, we propose the targeted policy recommendations to governance this phenomenon based on the results of empirical research.