Research On Government Capital Market Salvation And Its Economic Consequences

June 2015,Chinese Security Market turmoil.In order to maintain the stability of the securities market,the Chinese government took a direct intervention.On the one hand,the government bailout plays an important role on the stabilization of the stock market and the financial risk prevention system.On the other hand,although the China Securities Financial Corp purchased lots of high quality stocks,here were still the majority of low-quality stocks,and some companies showed a continued loss trend.It caused the public's question about the existence of transfer of benefits during the bailout.It's necessary to conduct an objective assessment through weighting the benefits and costs.But there is still a lack of rigorous academic study of the government bailout behavior on June 2015.Based on this,this paper attempts to analyze the government bailout behavior and its economic consequences by answering the following three questions: First,what factors affect the listed companies to become objects of the assistance? Second,what kind of reaction of the shares of listed companies when the market aware of those listed companies? Third,how the stock portfolio to behave in the market after the bailout?The third chapter analyzed the factors that affect the company become a rescue object in the process of government from the following two aspects: First,what factors determine the China Securities Financial Corp become the top ten shareholders of listed companies.Results show that the factors include politic association,company size,asset-liability ratio,market value,price-earning ratio and equity concentration.Second,what factors affect the excess purchase? By the empirical study found that the company size,price-earning ratio,equity concentration will affect the government's choice,and find out the significance of political connection factors in the study of the impact of private enterprises as over-purchase objects.From the above two conclusions,it shows that political connection,which is a special link between the government and enterprises,has a significant impact on the government's rescue options,which means potential rent-seeking problems.The fourth chapter analyzes the market reaction to the listed companies to become government bailout by event study method.Event Study results showed that: the cumulative abnormal return is significantly greater than zero,shows not only the disclosure of the event for the enterprise value,but also shows a positive response to the market.The fifth chapter using the Fama-French three-factor model to analyze the market performance of the purchased portfolio.The empirical results show that: a bailout of a large proportion of the portfolio did not get beyond the return of the market portfolio,indicating that the government invested in this part of the rescue funds did not get its desired effect,to some extent means that the cost of bailout.The innovation of the thesis is mainly reflected as followings: First,carefully analyzed the behavior of Chinese government bailout stock market and its economic effects in July 2015 from the perspective of academic research.Second,enrich the research literature about the political connections.In this paper,the research results show that in the process of government bail-out,politically connected companies are more likely to become a government bail-out agency purchase object,and was bought by the excess;Further provides the value of China's political relation in the process of transition with the empirical evidence.Third,on the research method,this paper proposes the concept of excess purchase to describe the behavior of the government rescue organization in view of the difficulties in collecting the detailed data from the government bailout.