Spillover Effect Of Foreign Ownership In Chinese Listed Companies

China economy has been growing fast since she became a member of World Trade Organization. With a steady political environment, China has become the most active market of foreign investment in the world. And now reforming is the main direction of China economy, how to using the civil capital and foreign money sufficient will be one of the most important questions of Chinese reforming.Purchasing the stock right of Chinese listed companies has become the main way into Chinese economy for foreigners and foreign companies. As foreign investment activities more and more active in China, they show some interesting characteristics: the first one is the more and more quantities of M&A with higher and higher amount, the second one is the phenomenon of buying the equities of the leader companies of industry, and the third one is the uneven phenomenon of foreign capital flow to the area and industry. Although our country has become one of the most countries which foreign capital flow to, the form by holding stock right is about5percent of the mount which measures the foreign capital flow to China, it means the foreign capital which flows to China by buying Chinese listed companies’ equities will be more and more as same as the influence. So searching how the foreign capital affects our stock market and our economy has academic meaning and social meaning. Therefore, this article will study the influence which is made by the foreign ownership of the Chinese listed companies, and how this happens.According to the former research and practice, we put forward four hypothesis:the first one is that the existence of foreign equity improves the operating performance of the listed companies, the second one is that foreign capital holdings promotes the operating performance of the listed companies, the third one is that equity concentration helps improving the operating performance of the listed companies, the last one is that foreign ownership improve the performance by promoting the operating efficiency of the listed companies.We examine the Return of Assets of the Chinese listed companies which have the foreign ownership from2008to2012, and the number of the companies is156. By using univariate and multivariate analysis and panel regression analysis, we study the effect on ROA which the foreign ownership has. The empirical analysis shows that foreign ownership has significant positive effect on the operating performance of Chinese listed companies, and that improving the operational efficiency of the company’s assets is an important way of the spillover effects of foreign ownership. At the same time, the analysis shows that the listed companies’ assets structure, the board characteristics, the locations and the nature of the companies have an effect on the companies’ operating performance.