The Study Of Effects Of Listed Companies’ Different Financing Methods On Corporate Performance

The establishment, survival and development of enterprises are closely related to its financing activities. Different financing behavior and Financing Preference will form different capital structure, resulting in a significant impact on the company’s governance structure, operating performance, so financing is crucial for enterprises. After the company’s IPO, its refinancing ability plays a crucial role in its subsequent development.It is worth mentioned that the domestic scholars’research on the relationship between debt financing and corporate performance were not much, while the research includes both equity financing and debt financing on the performance of listed companies is less. Besides, the previous studies to measure the operating performance of listed companies usually choose a single index such as Tobin’s Q, or ROE, etc., in the selection of the sample of listed companies usually choose1-3years as a research sample, the study period of the listed companies performance is also short, typically1-2years after financing.On the basis of the previous studies, this paper aims to conduct a comprehensive study on different financing behavior’s influence on corporate performance of listed companies. Research mainly about the following two points: First, the financing scale of private placement, public issuance, placement, convertible bonds, corporate bonds, middle-term notes these types of listed companies.Second, whether the listed company’s performance will change before or after the financing activity? If that is yes, then how does the performance change? Whether the impact on the performance of the listed companies caused by different companies is different?Firstly, the related concept of refinancing was defined. Then the classical theory of corporate finance-related were summarized, and divided the financing behavior of listed company into two categories, equity financing and debt financing. Then reviewed the relevant literature on finance which from the domestic and foreign scholars. By induction we found that the current domestic and foreign scholars on refinancing issues focused on the financing efficiency and equity financing preference. For the efficiency of research were mainly focused on the financing’s impact especially the equity financing’s impact on the listed company’s operating performance and stock price.For the study content, the paper divided the financing method of listed company into two categories, equity financing and debt financing. According to the evolution of time, illustrate the equity financing and debt financing markets development process of listed companies. Then make a comparative analysis of the major ways of equity financing and debt financing. Finally, combing the listed companies’financing scale through share placements, convertible bonds from the year1993to2012, as well as the financing scale of the corporate bond and middle-term notes from the year2007to2012, then gives the relevant descriptive analysis.In the empirical part, we studied the performance’s change of listed companies who conduct financing during the year2007to2010, and the study period is totally six years from the two years before the financing activity to the third after the financing activity. First, we select the ROA, ROE, EPS, sales margin and so on these five performance indicators to measure the company’s performance. Then calculates the mean and median of the five indicators from the two years before the financing activity to the third after the financing activity and observes the change of them. Then conduct the significant T test on the mean value and carried out Wilcoxon signed-rank test on the median. Again, using the factor analysis method to calculate the composite score of the sample companies, and analysis how does the performance change? Whether the impact on the performance of the listed companies caused by different companies is different?The results showed that, first, listed companies’ financing scale are getting larger year by year. Financing of listed companies develops from the initial placement only to the issuance, allotment, convertible bonds, corporate bonds, middle-term bonds altogether. Second, the performance indicators of listed companies declined during the study period regardless of different financing methods. Third, different financing methods have different impact on the company performance the existence of differences in the effects of different ways of financing the company’s performance. Overall, the company which issue convertible bonds performs best, followed by the companies which financed by issuance and allotment of shares, and finally are the companies which issue corporate bonds or middle-term notes.Finally, this paper gives a brief analysis to the conclusions.The innovations of this paper were as follows. First innovation is about the content. Previous studies on listed companies’financing behavior and corporate performance were concentrated in equity financing’s impact on corporate performance, few studies were about the relationship between debt financing and corporate performance, and comparative analysis of the impact of the two types of financing on firm performance were even less. In this paper, we studied the following five financing methods’influence on corporate performance, they are the issuance, allotment, convertible bonds, corporate bonds and middle-term bonds. As a result, the content of the study carried out innovation.Secondly, the data has an innovation, In the selection of the sample, previous studies usually selected the company which financed during1to3years, so the studied sample was quite a few. What’s worse, the study period of the listed companies’ performance was also short. In this paper, we studied the performance’s change of listed companies who conduct financing during the year2007to2010, and the study period is totally six years from the two years before the financing activity to the third after the financing activity. In a word, we increased and deepened the samples, this is one of the innovations.Finally, the research methods of the relationship between financing behavior of listed companies and its corporate performance has some innovations. Most previous studies only use a single index, such as Tobin’s Q, or ROE, etc. to measure the operating performance of listed companies. This paper will use the ROA, ROE, EPS and other two indicators and Factor Analysis to conduct a comprehensive measure of corporate performance.This study has the following shortcomings. First, the measurement of the performance of listed companies should be multifaceted, yet using the financial indicators to measure a company’s performance is one-sided. Whether these changes in financial indicators can truly reflect the changes in the performance of listed companies is debatable. Second, due to the late start of China’s securities market, and in this article inspection intervals and assumptions, the sample data is, so this article fails to conduct a sub-sector analysis of the performance of listed companies, it can’t excluded the industry factors’influence on listed companies’ performance.Third, due to the limitations of time and effort, when inspecting the performance of the company before and after the financing activity, this paper didn’t conduct a comparative analysis between our sample and all the A-share market companies. So it is not sure that whether the declines of the company’s performance after the financing is influenced by the environment of the stock market.