Research On The Long-term Performance Of The Asset-injection Of The Private Placement

With the arrival of non-tradable shares reform and all-round circulation age, the passion of large shareholder on asset injection rises unprecedentedly, and a new hotspot has appeared in Chinese stock market--asset injection by private placement. Compared with the overseas study, the study of relevant problems about asset injection by private placement in China is still in the stage of development. The related theoretical study isn’t mature, and many scholars have successively discussed about the dual connected transactions. The injection of large shareholder is bound to cause the performance fluctuation of listed companies. In the long term, why do the large shareholders actively promote the injection? What economic consequences will produce after the injection by private placement of listed companies? Will such effect cause the expropriation of medium and small shareholders or benefit the performance of listed companies? It has theoretical and practical significance to study these problems for standardizing the injection of listed companies, stabilizing the performance and strengthening security supervision.Focusing on three aspects of large shareholder, asset injection and expropriation, the paper firstly analyzes the situation and impetus of asset injection by private placement. Then the paper explains the existed expropriation motivation of large shareholders during the asset injection in detail based on the type Ⅱagency theory and motivation of internal and external. Finally, choosing the companies which have completed asset injection by private placement of A shares in Shanghai and Shenzhen from January, 2006 to December, 2012, the paper discusses the economic impact of asset injection by private placement from the two aspects of long-term market performance and business performance. Hereinto, adopting the event study to examine the long-term market performance, and the paper compares the abnormal return of purchasing and holding from four aspects: relevance of asset injection, height of appreciation rate of asset injection assessment, ownership property and largest proportion of shareholding. For the examination of long-term business performance after asset injection, the paper mainly adopts empirical study from two accounting indexes: return on equity and return on total assets. The results show that for the listed companies implementing asset injection by private placement, the long-term market performance becomes worse obviously; large shareholders have the motivation of expropriation; the benefits of medium and small shareholders are damaged. The business performance of large shareholders in the injection stage rises obviously and then gradually reduces which shows the tendency of increasing first and then decreasing in the long time. The appreciation rate of larger shareholders’ asset injection assessment is generally higher, and has the negative correlation with long-term corporate performance. Asset injection is positively correlated with long-term market performance, and the accumulative return rate of purchasing and holding related asset injection is higher compared with the non-related asset. Shareholding ratio of large shareholders is generally higher in the domestic listed companies, and the height of large shareholders’ stock is positively correlated with the motivation of expropriation which will influence the long-term market performance. Ownership property doesn’t affect the corporate performance obviously in the long time.It has practical significance for stabilizing the corporate performance, standardizing the asset injection and protecting the benefits of medium and small shareholders to discuss the economic consequences of asset injection by private placement. According to the above research conclusions, we should further standardize the disclosure system of asset injection, and encourage to inject high quality assets. At the same time, relevant departments should strengthen the supervision and improve the mechanism of assets appraisal to create a healthy investment environment for the vast investors.