The Impact From Different Period Investment By Private Equity On Corporate Performance

This study is based on490company-samples backed by private equitybefore they got listed in China stock market. All data collected in this paper isprior to Feb.8,2013. This paper tries to analyze the impact from differentperiod private equity investment on corporate performance by regressionmethod.In the paper, the author firstly reviews the basic concept of private equityinvestment, classification, characteristics, the mode of organization andoperation, the value creating process and the development history ofdomestic and oversea markets. Secondly, the paper will give a briefintroduction about some research literature on the relationship betweenprivate equity investment and corporate performance. Thirdly, the regressionmethod will be employed to analyze the relationship between the investmenthorizon prior to listing and other indicators from three main aspects of a company, including corporate governance structure, stock performance andfinancial performance. Then, the conclusion has been delivered: In thecorporate governance structure aspect, the early investment of private equityhas no significant impact on the structure of board, but has some impact onthe ownership concentration. In the stock performance aspect, the earlyinvestment has no significant impact on the stock issuing and returnindicators, but significant with the risk indicator. In the financial performanceaspect, the early investment has no significant impact on profitability andgrowth indicators. Finally, the author has analyzed the possible reasons forthe no significant results. In addition, the author has made some suggestionfor the future development of private equity in China.