Research On The Influencing Factors Of Chinese Enterprises’ Overseas Delisting Decision

The cross-listing behaviors of China’s enterprises can date back to the 1980 s. It has been more than 30 years since Tsingtao Brewery Company listed in Hong Kong stock market. The nature of the listed companies included the state-owned enterprises and private enterprises. Chinese firms usually choose to list in stock markets of the United States, Japan, Hong Kong, London and other countries and regions in directly or indirectly ways.Overseas listing has important implications for Chinese enterprises, however, in recent years, in global world many enterprises delisted from the overseas capital market, including exchanges of the United States, Singapore, Chinese Hong Kong, and London. Among which the firms delisting from the United States accounted for the largest share. Therefore this paper mainly focused on those delisting enterprises from the United States. Chinese scholars barely do empirical studies on the factors which leaded to the Chinese enterprises’ delisting decisions. The existing literatures are mainly focused on the demand of overseas-listing, the performance of listed companies after the listing behavior and so on, for enterprise delisting research more focused on normative research.To find out the factors on the Chinese enterprises’ overseas delisting behaviors, this article combined the research on the demand of oversea listing and the current research of Chinese scholars on the reasons why Chinese firms delisted from oversea stock market.Employing a sample of 63 delisting Chinese firms from US stock markets during 2010 to 2013, this paper investigates the listing age, delisting way and the factors that lead to Chinese firms delisting from US. The analysis results show that the listing ages of sample firms are generally short and different from the way of oversea listing. Some firms have to delist from US stock markets since the short of short-sellers including Muddy Water and Citron, financial fraud and failure to disclosure accounting information. Some firms voluntarily delist their stocks from US stock markets through privatization. The daily average trading volumes in the year before delisting of the majority of firms that become private are lower than the daily average trading volumes in the same period both of American stock markets and A shares market in China.This article chose enterprise which stay in the United States stock market the as a panel of control samples, and the regression result of this paper about delisting choices found that the enterprises with lower growth rate, higher asset-liability ratio, lower profitability are more easily to delist from the United States. Finally, the paper put forward some advice on overseas listing.