Corporate Financing’s Effects On Corporate Performance Under Different Industml Policies

The government has developed and implemented a "Five-Year Plan" since the founding of New China, which lead to the new China’s economic growth and social development. Also the introduction of the relevant industrial policies in the different stages provided the correct direction of the economic development and could guide the funds flow to support the industries that the industrial policy want to support in order to achieve optimal allocation of resources.The forms of industrial policy in the capital markets is that the listed companies which was supported are easier to obtain financing, and domestic scholars concluded that China’s listed companies prefer to equity financing by studying their structural problems. However, the ultimate goal of the top-level design is not to make listed company to obtain financing, but to make the companies which have obtained financing apply the funds effectively for performing better in the operation, which means the industrial policies have played real role on the real economy. The studies are rare about whether the industrial policy have guided the allocation of capital reasonably as well as whether the allocation of capital would achieve the desired effects of industrial policy as the late development of China’s capital markets. Most of the existing researches only study the Equity refinancing or debt refinancing impacting on company performance and don’t study the effect of industrial policy.In this paper, according to the key words "development" in the Tenth Plan and "key development" in Eleventh Five Year Plan for the industry of new material, we study firstly the relationship between the industrial policy and corporate financing, and then make the analysis of the company’s operating performance after financing in the context of industrial policy by the combination of theoretical and empirical approach. In theory, this paper reviews the Western classical government economic theory and financial accelerator and some literatures about policy transmission mechanism, eventually make some evaluation in my opinion. And then this paper describes the development of the new materials industry in recently two complete "Five-Year Plan", and summarizes the refinancing of A-share market listed companies in new materials industry including IPO/right share/public offering and convertible bonds. In the empirical research,this paper studying the role of industrial policy by three types of financing including IPO and SEO(right share and public offering) concludes that industrial policy has a positive effect on corporate refinancing and corporate refinancingcan improve the company’s operating performance. Specifically,the company’s operating performance improved after IPO and operating performance improvedmore obvious when the industrial policy support more.We reached the same conclusion that the company’s operating performance improved after the public offering and operating performance improvedmore obvious when the industrial policy support more. However, the right share can’t affect operating performance significantly.This paper will give some explanation according to the results of empirical research and put forward policy recommendations.Firstly, if the government wants to support the development of certain industry, it must make some related industrial policies because industrial policy can indeed play an effect on supporting the industries. Industrial policy as an important means of state regulation can guide the direction of economic development and achieve efficient allocation of social resources.Secondly, because refinancing can play a positive role in improving the performance of the company, especially the IPO, the government can establish a multi-level capital market to promote the development of the refinancing market so that the company can obtain funds. Specifically, there are many methods such as specifying refinancing access policy, establishing mechanism of cash dividends of listed companies, strengthening the supervision of listed companies, improving the internal governance of listed company and so on.