The Study On Influencing Factors Of Private Placement’s Dicount Rate In China

After China’s implementing the split-share reform, the private placement in listed companies has come to the eyes of the public quickly. It has developed quickly in China for its advantages of low issued cost and financial demand to the listed company, being approved easily by CSRC. Through these years, it has become one of the main methods for equity financing. Therefore, there are many researches about it in the academy. However, to the private placement, the previous scholars mainly fixed their eyes to the pricing mechanism, the influences to the price of stocks in the long-term and short-term and so on. There are also some scholars studied the motivation of the private placement from itself. They pointed that private placement may be one method which the large shareholder can take advantage to expropriate, but there is not a unified conclusion, which is a goal that this article will to testify with latest data. In addition, some scholars found some financial norm has an effect on the discount rate by taking it to the positivism model as an explanatory variable, but they have not analyzed it from other financial indicators.Therefore, this article is based the data of 915 listed companies from 2012 to 2014, which have implemented private placement successfully. By building multiple linear regression models, we have studied the factors affecting the discount rate in the private placement. From the angles of ownership structure and finance, this article attempt to analyst the discount rate in the. private placement and testify some related research by the previous so that we could put forward some new points.Firstly, through theoretical analysis, this article tries to find out inner factors in the companies which may affect the discount and are based to pick up the assumptions. After descriptive statistics and correlation analysis, we use three multiple linear regression models to testify our assumptions from the angles of ownership structure and finance and use robustness test to assure the reliability so that come to our conclusion. Through our research about the discount rate of the private placement from the ownership structure of the companies, we find that the indemnification put forward by the previous still exist. And the discount rate is lower when the large shareholders take part in the private placement, more and then, the subscription ratio is negatively correlated with the discount rate. Oppositely, we find that stake of the top and the second shareholder is positively correlated with it. It states that the shareholder who charged the company cannot control the situation completely in the games of interest. In addition, the interest coordination may occur between many shareholders. In another way, we find the quality of companies is related to the discount rate when we turn to the finance of the companies, namely, the better the quality of the companies is, the lower the discount rate. But there are some differences in the influence degree between different financial indicators.According to the results of our study and the reality of China, we raise some political suggestions aiming at the tunneling and the influences on which the financial indicators have in private placement, including improving the pricing mechanism and the ownership structure in a company, strengthening the information disclosure mechanism.