The Research On The Shares Increasing Announcement Effect And Motivations Of Majority Shareholders And Executives

With the shares increasing announcement effect of the listed companies’ insidersincluding majority shareholders and executives having become the focus of manyexperts and scholars’ research in recent years. But so far, the scholars’ researches in thedomestic is relatively rare, the analysis angles often only focuses on a certain level,and these researches are also lack of deep internal mechanism’s thinking aboutincreasing announcement effect of the certain two kind of insiders----majorityshareholders and executives. From the realistic sense, with the increasing of theincreasing announcement of majority shareholders and executives, investors havewondered whether to buy these stocks profitable or not, and wanted to know that if buythese stocks how much excess returns can obtained. The paper has conducted empiricalresearch on the market effect and the motivation of shares increasing of the majorityshareholders and executives, in addition, the paper has analyzed the factors of theeffect of the announcement of majority shareholders and executives. The data of thepaper varies from1st January2012to31st December2013. This paper adopts eventstudy method to test the market effect of the insiders’ shares increasing behavior. Theresults of the researches show that the listed majority shareholders and executives bothmake positive reactions, but their reaction degree is obvious different. It means theinformation between the majority shareholders and executives in the companies isdifferent, the shares increasing behavior of the majority shareholders can make moreCARs than the announcement effect’ of the executives in the secondary market. Theempirical research results confirm the information that majority shareholders held ismore influential than that the executives held. Moreover, there is a stronger reaction tothe effect of announcement of the majority shareholders than that of the executives inthe secondary market. From the point of view of internal factors of the event, the firstincreasing scales and the post of the increasing person could significantly affect thesize of the announcement effect, The larger scale of increasing, the stronger the effect.Besides, In terms of motivations, the comparative study found that the majorityshareholders’ shares increasing announcement effect are often related to equity controlability, to maintain equity control status is the main reason for the shares increasingbehaviors of majority shareholders, while the individual utility maximization is themain reason of executives.