The Study On The Impact Of Regional Financial Development To Listed Companies That Apply For Secondary Equity Offering

Equity refinancing in China began in1993, developing from the initial scale of6.019billion yuan in1993to the scale of457.508billion yuan in2013, while equity refinancing in the proportion of equity financing increased from20.5%in1993to79.32%in2012. Due to the IPO moratorium, all of the equity financing is through secondary and rights issue these two types of equity refinancing in2013. So equity refinancing now occupies very important position in the finance market. These funds have played a positive role in promoting the development of enterprises.On the other hand, with the constant development of market economy in our country, unbalanced development of regional economy is also a reality of our country’s economic and social problems. The more developed the financial market, the larger the scale, financing enterprises can enjoy more opportunity, and in areas with poor financial development, finance companies are obviously limited by the size of the local financial institutions. Studies have found that enterprises in a relatively low degree of financial development in our country prefer to equity financing rather than debt financing, because the cost of equity financing in the unified stock market in different regions is basically the same, while the cost of debt financing in the developed areas is relatively low. Because financial development helps enterprises to overcome the "moral hazard" and "adverse selection" problems, thus reducing information asymmetry and incomplete contract caused by the imperfect capital market, so the financial development is conducive to ease financing constraints of listed companies--especially private listed companies.So, does companies in different financial development area have equal opportunity for equity refinancing, and after getting the equity refinancing opportunities does they have the same performance, the study of these problems can be extended to the study of equity refinancing efficiency of resource allocation.Initially, the study of equity refinancing efficiency of resource allocation started from the perspective of earnings management, studies suggest that some companies use earnings management in an effort to achieve the equity refinancing conditions can make some money to flow into the enterprise less efficient, reduce the efficiency of resource allocation. Subsequently emerged studies research the equity refinancing efficiency of resource allocation from the perspective of property rights. Studies suggest that the same situation in other conditions, the state-owned nature enterprises are more likely to have the opportunity of equity refinancing than non-state-owned nature of the enterprise, and the empirical analysis results show that non-state-owned nature of the enterprise will have more outstanding performance after get the equity refinancing funds. As a result, this kind of inequitable financing opportunities reduces the resource allocation efficiency of equity refinancing.On the basis of reference literatures, this paper use data of the equity refinancing of listed companies in China’s capital market between2003and2013as the research sample to investigate the influence of regional financial development level on equity refinancing efficiency of resource allocation. First of all, through descriptive analysis of the data, it can be seen that companies in more developed region are more accessible to equity refinancing opportunities than the companies in less developed region; Second, using Logistic regression model to analyze data, we can find that under the same control variables, companies in more developed region are still more accessible to equity refinancing opportunities than the companies in less developed region; Then, through the multivariate linear regression model, we found that companies obtained the opportunity of equity refinancing will have better performance in the next two years; Finally we draw the conclusion:while the condition of profit ability, enterprise scale, capital structure and the growth are the same, the enterprise in high level of financial development area is more likely to get equity refinancing opportunities and can use raised funds more efficient through investment, this may be due to financing inequitable opportunities, thus affecting the development of the enterprise and further to deepen the inequality.Therefore, the government decision-making departments should appropriately increase financial policy support on the listed company in less-developed regions about its refinancing policy, to ensure that financial capital requirements of listed companies is reasonable satisfied in less developed areas, as far as possible to ensure that the equity refinancing resource allocation is fair, to promote the development of regional economy more balanced.